2. [-/1 Points] CAMMBM 12.E.003. MY NOTES l ' ASK YOUR TEACHER I ' PRACTICE ANOTHER Blair & Rosen, Inc. (B&R), is a brokerage rm that specializes in investment portfolios designed to meet the specic risk tolerances of its clients. A client who contacted BER this past week has a maximum of $75,000 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 6%, whereas the Blue Chip fund has a projected annual return of 5%. The investment advisor requires that at most $50,000 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 a risk rating of 6 per thousand dollars invested. The Blue Chip fund has a risk rating of 4 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 6(10) + 4(10) = 100. Finally, B&R developed a questionnaire to measure each client's risk tolerance. Based on the responses, each client is classied as a conservative, moderate, or aggressive investor. Suppose that the questionnaire results classied the current client as a moderate investor. Bad! recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 360. (a) Formulate a linear programming model to nd the best investment strategy for this client. (Assume N is the amount invested in the internet fund project and B is the amount invested in the Blue Chip fund. Express the amounts invested in thousands of dollars.) Max s.t. Available investment funds Maximum investment in the internet fund Maximum risk for a moderate investor N,BZO (b) Build a spreadsheet model and solve the problem using Excel Solver. What is the recommended investment portfolio (in dollars) for this client? Internet fund $ blue chip fund $ What is the annual return (in dollars) for the portfolio? s (b) Suppose that a second client with $75,000 to Invest has been classied as an aggressive Investor. B&R recommends that the maximum portfolio risk rating for an aggressive Investor is 400. What Is the recommended Investment portfolio (in dollars) for this aggressive Investor? internet fund $ blue chip fund 3 (d) Suppose that a third client with $75,000 to Invest has been classied as a conservative Investor. B&R recommends that the maximum portfolio risk rating for a conservative investor Is 280. Develop the recommended Investment portfolio (In dollars) for the conservative Investor. Internet fund $ blue chip fund $ Need Help