The following data apply to Problems 2 to 8: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond, and the third is a T-bill money market fund that yields a rate of 8%. The mean and the standard deviation of the risky funds is as follows:

	Expected Return	Standard Deviation
Stock fund (S)	20%	30%
Bond fund (B)	12%	15%

The correlation between the fund returns is 0.10.

Problem 2. What are the investment proportions in the minimum-variance portfolio of the two risky funds (i.e., stock and bond funds), and what is expected value and standard deviation of its rate of return?