Mathematics
Mathematics, 21.08.2019 05:20, herchellann302

Blair & rosen, inc. (bbr) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. a client who contacted b& r this past week has a maximum of $55,000 to invest. b& r's investment advisor decides to recommend a portfolio consisting of two investment funds: an internet fund and a blue chip fund. the internet fund has a projected annual return of 17%, while the blue chip fund h a projected annual return of 8%. the investment advisor requires that at most $25,000 of the client's funds should be invested in the internet fund. b& r services include a risk rating for each investment alternative. the internet fund, which is the more risky of the two investment alternatives, has risk rating of 5 per thousand dollars invested. the blue chip fund has a risk rating of 5 per thousand dollars invested. for example, if $10,000 is invested in each of the two investment funds, b& r's risk rating for the portfolio would be 5(10) + 5(10) = 100. finally, b& r developed a nal to measure each client's risk tolerance. based on the responses, each client is classified as a conservative, moderate, or aggressive investor. suppos that the naire results classified the current client as a moderate investor. b& r recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 240. (a) formulate a linear programming model to find the best investment strategy for this client. let i = internet fund investment in thousands b = blue chip fund investment in thousands if required, round your answers to two decimal places. max 0.21 + 0.09 st. 50 35 available investmer funds maximum investmer in the internet fund maximum risk for a moderate investor 4 s 240 ib mo (b) build a spreadsheet model and solve the problem using solver. what is the recommended investment portfolio for this client? internet fund 3 - 2 0 blue chip fundas 30 what is the annual return for the portfolio? $ 5.1 (c) suppose that a second client with $55,000 to invest has been classified as an aggressive investor. b& r recommends that the maximum portfoli risk rating for an aggressive investor is 350. what is the recommended investment portfolio for this aggressive investor? internet fund =s 50,000 blue chip fundas 15000 annual returns 9000 (d) suppose that a third client with $55,000 to invest has been classified as a conservative investor. b& r recommends that the maximum portfolio risk rating for a conservative investor is 150. develop the recommended investment portfolio for the conservative investor. internet fund = 0 blue chip funds 4 annual returns 3 600

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