12. LI eBook 13. 14. Blair & Rosen, Inc. (EUR) is a brokerage firm that specializes in investment partfalics 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. BSR's Investment advisor deodesta recommend a portfolia consisting of two Investment funds: an Intemet fund and a Blue Chip fund. The Internet fund has a projected annual return of 17%, while the Blue Chip furd has a projected annual return of 8%. The investment advisor requires that at mast $25,000 of the client's funds should be invested in the Internet tund. 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 a risk rating of 5 per thousand dollars invested. The Blue Chip fund has a risk rating of 5 per thousand dollars invested. For example, ir s10,000 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 questionnaire to measure each client's risk tolerance. Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire 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. 15. . 16. . 17. 18. O 19. 0 (a) Formulate a linear programming model to find the best investment strategy for this client. Let 7 - Internet fund investment in thousands B = Blue Chip fund investment in thousands If required, round your answers to two decimal places. If an amount is zero, enter"0". If the constant is "T" It must be entered in the box. Max .11 , + .07 3 s.t. + X 8 - - Select your answer - Available investment funds X + 1 X + 1 x 7 X Maximum investment in the internet fund B Select your answer - Select your answer - X Maximum risk for a moderate investor Select your answer X (b) Build a spreadsheet model and solve the problem using Solver. What is the recommenced investment partfolic for this client? Internet Fund - X Blue Chip Fund - What is the annual return for the portfolio? (c) Suppose that a second client with $55,000 to invest has been assified as an aggressive investor. B&R recommends that the maximum portfolio nisk rating for an aggressive investor is 250. What is the recommended investment portfolia for this aggressive Investor Intemet Fund - X Blue Chip Funds X Annual Returns (d) Suppose that a third dient with $55,000 to invest has been classified as a conservative Investor. BNR recommends that the maximum portfolia risk rating for a conservative Investor is 150. Develop the recommended investment portfolia for the conservative Investor. If an amount is zero, enter "0 Internet Fund - S Blue Chip Fund S X Annual Return X S 12. LI eBook 13. 14. Blair & Rosen, Inc. (EUR) is a brokerage firm that specializes in investment partfalics 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. BSR's Investment advisor deodesta recommend a portfolia consisting of two Investment funds: an Intemet fund and a Blue Chip fund. The Internet fund has a projected annual return of 17%, while the Blue Chip furd has a projected annual return of 8%. The investment advisor requires that at mast $25,000 of the client's funds should be invested in the Internet tund. 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 a risk rating of 5 per thousand dollars invested. The Blue Chip fund has a risk rating of 5 per thousand dollars invested. For example, ir s10,000 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 questionnaire to measure each client's risk tolerance. Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire 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. 15. . 16. . 17. 18. O 19. 0 (a) Formulate a linear programming model to find the best investment strategy for this client. Let 7 - Internet fund investment in thousands B = Blue Chip fund investment in thousands If required, round your answers to two decimal places. If an amount is zero, enter"0". If the constant is "T" It must be entered in the box. Max .11 , + .07 3 s.t. + X 8 - - Select your answer - Available investment funds X + 1 X + 1 x 7 X Maximum investment in the internet fund B Select your answer - Select your answer - X Maximum risk for a moderate investor Select your answer X (b) Build a spreadsheet model and solve the problem using Solver. What is the recommenced investment partfolic for this client? Internet Fund - X Blue Chip Fund - What is the annual return for the portfolio? (c) Suppose that a second client with $55,000 to invest has been assified as an aggressive investor. B&R recommends that the maximum portfolio nisk rating for an aggressive investor is 250. What is the recommended investment portfolia for this aggressive Investor Intemet Fund - X Blue Chip Funds X Annual Returns (d) Suppose that a third dient with $55,000 to invest has been classified as a conservative Investor. BNR recommends that the maximum portfolia risk rating for a conservative Investor is 150. Develop the recommended investment portfolia for the conservative Investor. If an amount is zero, enter "0 Internet Fund - S Blue Chip Fund S X Annual Return X S