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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 clients. A

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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 clients. A client who contacted B8R this past week has a maximum of $50,000 to invest. B8R'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 18%, and the Blue Chip fund has a projected annual return of 8%. The investment advisor requires that at most $25,000 of the client's funds should be invested in the internet furd. Bs. services include a risk rating for each investment aiternative. 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 $10,000 is invested in each of the two investment funds, BaR's risk rating for the portfolio would be 5 (10) + S(10)=100. Finally, B8R developed a questionnaire to measure each client's risk tolerance, Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire results classified the current client as a moderate investor. BQR recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 230. (a) Formulate a linear programming model to find the best investment strategy for this client. Let I= Internet fund investment in thousands B= Blue Chip fund investment in thousands If required, round your answers to two decimal places. If an amount is zero, enter " 0 ". If the constant is " 1 " it must be entered in the box. (b) Bulld a spreadsheet model and solve the problem using Solver. What is the recommended investment portfolio for this client? Internet Fund =$ Blue Chip Fund =$ What is the annual retirn for the portfolio? (c) Suppose that a second client with $50,000 to invest has been classified as an aggressive imvestor. B8R recommends that the maximum portfolio risk rating for an aggressive investor is 340 . What is the recommended investment portfolio for this aggressive investor? Internet Fund =$ Blue Chip Fund =$ Annual Return =$ (d) Suppose that a third client with $50,000 to invest has been classiffed as a conservative investor. Bart recommends that the maximum portfolio risk rating for a conservative investor is 150 . Develop the recommended investment portfolio for the conservative investor. If an amount is zero, enter" "0". Internet Fund =$ Blue Chip Fund =$ Annual Retum =s

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