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Blair & Rosen, Inc. ( B&R ) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its

Blair & Rosen, Inc. (B&R) 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 12%, and the Blue Chip fund has a projected annual return of 9%. 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 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, if $10,000 is invested in each of the two investment funds, B&R's risk rating for the portfolio would be 5(10)+5(10)=100. Finally, B&R developed a questionnaire to measure each client's risk tolerance. Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire results classified the current client as a moderate investor. B&R recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 250.
(a) Formulate a linear programming model to find the best investment strategy for this client.
Let I= Internet fund investment in thousands
B= Blue Chip fund investment in thousands
If required, round your answers to two decimal places. If an amount is zero, enter "0". If the constant is "1" it must be entered in the box.
\table[[- Select your answer -vv,I+,B,F,,],[s.t.],[,I+,B,- Select your answer -vv,$,Available investment funds],[,I+,B,- Select your answer -vv,$,Maximum investment in the internet fund],[,I+,B,- Select your answer -vv,,Maximum risk for a moderate investor],[,,,- Select your answer -vv,,]]
(b) Build a spreadsheet model and solve the problem using Solver. What is the recommended investment portfolio for this client?
Internet Fund =$
Blue Chip Fund =$
What is the annual return for the portfolio?
(c) Suppose that a second client with $55,000 to invest has been classified as an aggressive investor. B&R recommends that the maximum portfolio risk rating for angressive investor is 310. What is the recommended investment portfolio for this aggressive investor?
Internet Fund =$
Blue chip fund=
Annual return=
(d) suppose that a third client with $55,000 to invest has been classified as a conservative investor. B&R reccomends that the maxiamum portfolio risk rating for a consecutive investor is 150. Develop the reccomended investment portfolio for the conservative investor. If an amountis zero, enter "0".
Internet fund=
Blue chip fund=
Annual return=
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