Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
File:BandR 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 $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 9%, whereas the Blue Chip fund has a projected annual return of 8%. 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 classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire results classified the current client as a moderate Investor Bar recommends that a client who is a moderate Investor limit his or her portfolio to a maximum risk rating of 325. Use the attached spreadsheet model, add the Max Risk Rating and solve the problem using Excel Solver What is the annual return, in thousand of dollars, for the portfolio? AutoSave OFF 8C... Home Insert Reu Draw Formulas Data Page Layout Times New Roman 12 AA === Paste BIU v A H5 XFx A B D E 75 Budget (5000) Max Risk Rating wa Internet und 9 Annual Return 10 Risk Rating per (5000) 11 Max Investment (5000) Blue Chip Fund 9% 6 4 50 13 Model It Fond 16 Amount to invest (S000 ile Chin Fund 0 0 18 Total Invested (5000) 19 Total Risk Rating 20 21 Total Rem (5000) 22 23 24 0.000 EN99 ARNAXARAAARRRRRRRRRR$983 32 33 36 Ready

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Executives And MBAs

Authors: Wallace, Simko, Ferris

4th Edition

1618531980, 9781618531988

More Books

Students also viewed these Accounting questions

Question

Explain the meaning of ergonomics.

Answered: 1 week ago