SlideShare a Scribd company logo
A pension fund manager is considering three mutual funds. The first is a stock fund, the second
is a long-term bond fund, and the third is a money market fund that provides a safe return of 5%.
The characteristics of the risky funds are as follows: Expected Return Standard Deviation Stock
fund (S) 19 % 32 % Bond fund (B) 12 15 The correlation between the fund returns is 0.11. You
require that your portfolio yield an expected return of 14%, and that it be efficient, that is, on the
steepest feasible CAL.
a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.)
b. What is the proportion invested in the money market fund and each of the two risky funds?
(Round your answers to 2 decimal places.)
Proportion InvestedMoney market fund%Stocks%Bonds%

More Related Content

More from momdnazeer

a. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
a. Label a medial moraine with an A b. Label a lateral moraine wit.pdfa. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
a. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
momdnazeer
 
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdfa) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
momdnazeer
 
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdfa)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
momdnazeer
 
a) There are four major types of chemical reactions that break apart.pdf
a) There are four major types of chemical reactions that break apart.pdfa) There are four major types of chemical reactions that break apart.pdf
a) There are four major types of chemical reactions that break apart.pdf
momdnazeer
 
A. Compute net nonoperating expense (NNE) and net operating profit a.pdf
A. Compute net nonoperating expense (NNE) and net operating profit a.pdfA. Compute net nonoperating expense (NNE) and net operating profit a.pdf
A. Compute net nonoperating expense (NNE) and net operating profit a.pdf
momdnazeer
 
a) Clearly demonstrate your understanding of The U Process t.pdf
a) Clearly  demonstrate  your  understanding  of  The  U  Process  t.pdfa) Clearly  demonstrate  your  understanding  of  The  U  Process  t.pdf
a) Clearly demonstrate your understanding of The U Process t.pdf
momdnazeer
 
a) is normally conducted by a consultant and intended to facilitate.pdf
a)  is normally conducted by a consultant and intended to facilitate.pdfa)  is normally conducted by a consultant and intended to facilitate.pdf
a) is normally conducted by a consultant and intended to facilitate.pdf
momdnazeer
 
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdfA(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
momdnazeer
 
a) A special surveillance and rescue team is being deployed to count.pdf
a) A special surveillance and rescue team is being deployed to count.pdfa) A special surveillance and rescue team is being deployed to count.pdf
a) A special surveillance and rescue team is being deployed to count.pdf
momdnazeer
 
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdfA Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
momdnazeer
 
A standard money demand function used by macroeconomists has the f.pdf
A standard money demand function used by macroeconomists has the f.pdfA standard money demand function used by macroeconomists has the f.pdf
A standard money demand function used by macroeconomists has the f.pdf
momdnazeer
 
A Closer Look at Leadership Theories What is it that makes some peop.pdf
A Closer Look at Leadership Theories What is it that makes some peop.pdfA Closer Look at Leadership Theories What is it that makes some peop.pdf
A Closer Look at Leadership Theories What is it that makes some peop.pdf
momdnazeer
 
A population of cattle is observed over years. Most of the bulls are.pdf
A population of cattle is observed over years. Most of the bulls are.pdfA population of cattle is observed over years. Most of the bulls are.pdf
A population of cattle is observed over years. Most of the bulls are.pdf
momdnazeer
 
A patient reports to the clinic with a 5 days history of symptoms co.pdf
A patient reports to the clinic with a 5 days history of symptoms co.pdfA patient reports to the clinic with a 5 days history of symptoms co.pdf
A patient reports to the clinic with a 5 days history of symptoms co.pdf
momdnazeer
 
A pentagon is a five-sided figure. Write a program in python that pr.pdf
A pentagon is a five-sided figure. Write a program in python that pr.pdfA pentagon is a five-sided figure. Write a program in python that pr.pdf
A pentagon is a five-sided figure. Write a program in python that pr.pdf
momdnazeer
 
A newly identified virus infects and kills its plant host by inserti.pdf
A newly identified virus infects and kills its plant host by inserti.pdfA newly identified virus infects and kills its plant host by inserti.pdf
A newly identified virus infects and kills its plant host by inserti.pdf
momdnazeer
 
A one-way analysis of variance was conducted to explore differences .pdf
A one-way analysis of variance was conducted to explore differences .pdfA one-way analysis of variance was conducted to explore differences .pdf
A one-way analysis of variance was conducted to explore differences .pdf
momdnazeer
 

More from momdnazeer (17)

a. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
a. Label a medial moraine with an A b. Label a lateral moraine wit.pdfa. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
a. Label a medial moraine with an A b. Label a lateral moraine wit.pdf
 
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdfa) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
a) �Cu�l de las siguientes afirmaciones est� MENOS respaldada por .pdf
 
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdfa)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
a)Capital IQ platformunda kapsam listesi oluturmann amac nedir Gr.pdf
 
a) There are four major types of chemical reactions that break apart.pdf
a) There are four major types of chemical reactions that break apart.pdfa) There are four major types of chemical reactions that break apart.pdf
a) There are four major types of chemical reactions that break apart.pdf
 
A. Compute net nonoperating expense (NNE) and net operating profit a.pdf
A. Compute net nonoperating expense (NNE) and net operating profit a.pdfA. Compute net nonoperating expense (NNE) and net operating profit a.pdf
A. Compute net nonoperating expense (NNE) and net operating profit a.pdf
 
a) Clearly demonstrate your understanding of The U Process t.pdf
a) Clearly  demonstrate  your  understanding  of  The  U  Process  t.pdfa) Clearly  demonstrate  your  understanding  of  The  U  Process  t.pdf
a) Clearly demonstrate your understanding of The U Process t.pdf
 
a) is normally conducted by a consultant and intended to facilitate.pdf
a)  is normally conducted by a consultant and intended to facilitate.pdfa)  is normally conducted by a consultant and intended to facilitate.pdf
a) is normally conducted by a consultant and intended to facilitate.pdf
 
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdfA(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
A(n) ________, talep erisinin sola kaymas ile temsil edilirken, a(n).pdf
 
a) A special surveillance and rescue team is being deployed to count.pdf
a) A special surveillance and rescue team is being deployed to count.pdfa) A special surveillance and rescue team is being deployed to count.pdf
a) A special surveillance and rescue team is being deployed to count.pdf
 
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdfA Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
A Tiene un paciente con el siguiente reporte de patolog�a Selecci.pdf
 
A standard money demand function used by macroeconomists has the f.pdf
A standard money demand function used by macroeconomists has the f.pdfA standard money demand function used by macroeconomists has the f.pdf
A standard money demand function used by macroeconomists has the f.pdf
 
A Closer Look at Leadership Theories What is it that makes some peop.pdf
A Closer Look at Leadership Theories What is it that makes some peop.pdfA Closer Look at Leadership Theories What is it that makes some peop.pdf
A Closer Look at Leadership Theories What is it that makes some peop.pdf
 
A population of cattle is observed over years. Most of the bulls are.pdf
A population of cattle is observed over years. Most of the bulls are.pdfA population of cattle is observed over years. Most of the bulls are.pdf
A population of cattle is observed over years. Most of the bulls are.pdf
 
A patient reports to the clinic with a 5 days history of symptoms co.pdf
A patient reports to the clinic with a 5 days history of symptoms co.pdfA patient reports to the clinic with a 5 days history of symptoms co.pdf
A patient reports to the clinic with a 5 days history of symptoms co.pdf
 
A pentagon is a five-sided figure. Write a program in python that pr.pdf
A pentagon is a five-sided figure. Write a program in python that pr.pdfA pentagon is a five-sided figure. Write a program in python that pr.pdf
A pentagon is a five-sided figure. Write a program in python that pr.pdf
 
A newly identified virus infects and kills its plant host by inserti.pdf
A newly identified virus infects and kills its plant host by inserti.pdfA newly identified virus infects and kills its plant host by inserti.pdf
A newly identified virus infects and kills its plant host by inserti.pdf
 
A one-way analysis of variance was conducted to explore differences .pdf
A one-way analysis of variance was conducted to explore differences .pdfA one-way analysis of variance was conducted to explore differences .pdf
A one-way analysis of variance was conducted to explore differences .pdf
 

Recently uploaded

ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdfANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
Priyankaranawat4
 
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama UniversityNatural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Akanksha trivedi rama nursing college kanpur.
 
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdfবাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
eBook.com.bd (প্রয়োজনীয় বাংলা বই)
 
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments UnitDigital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit
chanes7
 
World environment day ppt For 5 June 2024
World environment day ppt For 5 June 2024World environment day ppt For 5 June 2024
World environment day ppt For 5 June 2024
ak6969907
 
Community pharmacy- Social and preventive pharmacy UNIT 5
Community pharmacy- Social and preventive pharmacy UNIT 5Community pharmacy- Social and preventive pharmacy UNIT 5
Community pharmacy- Social and preventive pharmacy UNIT 5
sayalidalavi006
 
BBR 2024 Summer Sessions Interview Training
BBR  2024 Summer Sessions Interview TrainingBBR  2024 Summer Sessions Interview Training
BBR 2024 Summer Sessions Interview Training
Katrina Pritchard
 
How to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP ModuleHow to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP Module
Celine George
 
Advanced Java[Extra Concepts, Not Difficult].docx
Advanced Java[Extra Concepts, Not Difficult].docxAdvanced Java[Extra Concepts, Not Difficult].docx
Advanced Java[Extra Concepts, Not Difficult].docx
adhitya5119
 
writing about opinions about Australia the movie
writing about opinions about Australia the moviewriting about opinions about Australia the movie
writing about opinions about Australia the movie
Nicholas Montgomery
 
S1-Introduction-Biopesticides in ICM.pptx
S1-Introduction-Biopesticides in ICM.pptxS1-Introduction-Biopesticides in ICM.pptx
S1-Introduction-Biopesticides in ICM.pptx
tarandeep35
 
Film vocab for eal 3 students: Australia the movie
Film vocab for eal 3 students: Australia the movieFilm vocab for eal 3 students: Australia the movie
Film vocab for eal 3 students: Australia the movie
Nicholas Montgomery
 
The History of Stoke Newington Street Names
The History of Stoke Newington Street NamesThe History of Stoke Newington Street Names
The History of Stoke Newington Street Names
History of Stoke Newington
 
Cognitive Development Adolescence Psychology
Cognitive Development Adolescence PsychologyCognitive Development Adolescence Psychology
Cognitive Development Adolescence Psychology
paigestewart1632
 
A Independência da América Espanhola LAPBOOK.pdf
A Independência da América Espanhola LAPBOOK.pdfA Independência da América Espanhola LAPBOOK.pdf
A Independência da América Espanhola LAPBOOK.pdf
Jean Carlos Nunes Paixão
 
Liberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdfLiberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdf
WaniBasim
 
Life upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for studentLife upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for student
NgcHiNguyn25
 
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
RitikBhardwaj56
 
PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.
Dr. Shivangi Singh Parihar
 
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
GeorgeMilliken2
 

Recently uploaded (20)

ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdfANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
 
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama UniversityNatural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
 
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdfবাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
 
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments UnitDigital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit
 
World environment day ppt For 5 June 2024
World environment day ppt For 5 June 2024World environment day ppt For 5 June 2024
World environment day ppt For 5 June 2024
 
Community pharmacy- Social and preventive pharmacy UNIT 5
Community pharmacy- Social and preventive pharmacy UNIT 5Community pharmacy- Social and preventive pharmacy UNIT 5
Community pharmacy- Social and preventive pharmacy UNIT 5
 
BBR 2024 Summer Sessions Interview Training
BBR  2024 Summer Sessions Interview TrainingBBR  2024 Summer Sessions Interview Training
BBR 2024 Summer Sessions Interview Training
 
How to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP ModuleHow to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP Module
 
Advanced Java[Extra Concepts, Not Difficult].docx
Advanced Java[Extra Concepts, Not Difficult].docxAdvanced Java[Extra Concepts, Not Difficult].docx
Advanced Java[Extra Concepts, Not Difficult].docx
 
writing about opinions about Australia the movie
writing about opinions about Australia the moviewriting about opinions about Australia the movie
writing about opinions about Australia the movie
 
S1-Introduction-Biopesticides in ICM.pptx
S1-Introduction-Biopesticides in ICM.pptxS1-Introduction-Biopesticides in ICM.pptx
S1-Introduction-Biopesticides in ICM.pptx
 
Film vocab for eal 3 students: Australia the movie
Film vocab for eal 3 students: Australia the movieFilm vocab for eal 3 students: Australia the movie
Film vocab for eal 3 students: Australia the movie
 
The History of Stoke Newington Street Names
The History of Stoke Newington Street NamesThe History of Stoke Newington Street Names
The History of Stoke Newington Street Names
 
Cognitive Development Adolescence Psychology
Cognitive Development Adolescence PsychologyCognitive Development Adolescence Psychology
Cognitive Development Adolescence Psychology
 
A Independência da América Espanhola LAPBOOK.pdf
A Independência da América Espanhola LAPBOOK.pdfA Independência da América Espanhola LAPBOOK.pdf
A Independência da América Espanhola LAPBOOK.pdf
 
Liberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdfLiberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdf
 
Life upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for studentLife upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for student
 
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
 
PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.
 
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
 

A pension fund manager is considering three mutual funds. The first .pdf

  • 1. A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 5%. The characteristics of the risky funds are as follows: Expected Return Standard Deviation Stock fund (S) 19 % 32 % Bond fund (B) 12 15 The correlation between the fund returns is 0.11. You require that your portfolio yield an expected return of 14%, and that it be efficient, that is, on the steepest feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.) Proportion InvestedMoney market fund%Stocks%Bonds%