Solve it correctly please. 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 thirdis a money market fund that provides a safe return of 6%. The characteristics of the risky funds are as follows:Expected Return248Standard DeviationStock fund (S)Bond fund (B)3381422The correlation between the fund returns is 0.14.What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Enter your answer as a decimal roundedto 4 places.)Sharpe ratio0.6208 X

Risk free rate = 6% Correlation between fund return = 0.14 Expected return on stock fund = 24%…

Answered: A pension fund manager is considering…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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