What does your graph show for the expected return and


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 fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return and Standard DeviationStock fund (S) 15% and 32% Bond fund (B) 9 and 23 The correlation between the fund returns is 0.15. Draw a tangent from the risk-free rate to the opportunity set. What does your graph show for the expected return and standard deviation of the optimal risky portfolio?

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Financial Management: What does your graph show for the expected return and
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