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1 . Recommend how much of the $ 8 0 0 , 0 0 0 should be invested in each of the three funds. What

1. Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation?
2. Assume that the client's risk index could be increased to 0.055. How much would the yield increase, and how would the investment recommendation change?
3. Refer again to the original situation, in which the client's risk index was assessed to be 0.05. How would your investment recommendation change if the annual yield for the growth fund were revised downward to 16% or even to 14%?
4. Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund?
5. The asset allocation model you developed may be useful in modifying the portfolios for all of the firm's clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible?

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