3. Chole Pitt, a very famous and wealthy actress has signed a contract with Bollywood investment. She has asked them to invest her savings of $300,000. Bollywood has recommended a mix of three investments, European Stock fund, Crypto fund, and Money market fund.

Below are some restrictions Bollywood firm has agreed to follow:

• A risk index fund of 0.05
• Fraction of Chole Wests portfolio invested in European stock fund is at least 10%, for Crypto fund also at least 10%, and at least 20% must be in money market fund.

The risk ratings for the European, Crypto and money market funds are 0.1, 0.05 and 0.01, respectively. A risk index is calculated as a weighted average of the risk ratings for the three funds where the weights are the fraction of the portfolio invested in each of the funds.

Bollywood is currently forecasting a yield of 20% on the European fund, 10% on the Crypto fund, and 6% on the money market fund.

1. Develop a linear programming model to select the best mix of investments for Chole West portfolio.

2. Use Solver to solve the model you developed in part (a).

3. How much may the yields on the three funds vary before it will be necessary for to company to modify Chloes portfolio?

4. If Chloe were more risk tolerant, how much of a yield increase could she expect? For instance, what if her portfolio risk index is increased to 0.06?

5. If Bollywood revised the yield estimate for the European fund downward to 0.10, how would you recommend modifying Chloes portfolio?