i asked this same question yesterday, it is Business analytics 3rd edition text book, the question is on page number 604-605. The subject is Quantittatve Business Analysis. thank you

CASE PROBLEM. INVESTMENT STRATEGY J. D. Williams, Inc. is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that rec- ommends the portion of each client's portfolio to be invested in a growth stock fund, an income fund, and a money market fund. To maintain diversity in each client's portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund mus be between 20% and 40% of the total portfolio value. Similar percentages for the other funds stipulate that between 20% and 50% of the total portfolio value must be in the in fund and that at least 30% of the total portfolio value must be in the money market Case Problem: Investment Strategy 605 In addition, the company attempts to assess the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, w tracted with a new client who has se e individual investor. For example, Williams just con- t invest Based on an evaluation of risk tolerance, Williams assigned a maximum risk index of 0.05 for the che O to invest. Based on an evaluation of the client's risk indicators show the risk of the growth fund a maximum risk index of 0.05 for the client. The firm's the income fund at 0.07, and the money market fund at 0.01. An overall portfolio risk index is computed as a age of the risk rating for the three funds, where the weights are the fraction of ortfolio risk index is computed as a weighted aver- portfolio invested in each of the funds. aree funds, where the weights are the fraction of the client's Additionally, Williams is currently forecasting annual vields of 18% for the growth fund, 12.5% for the income fund and 7 50 for the money market fund. Based on the infor mation provided, how should the new client be advised to allocate the $800,000 among the growth, income, and money market funds? Develop a linear programming model that will provide the maximum yield for the portfolio. Use your model to develop a managerial report. Managerial Report 1. Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation? 2. Assume that the client's risk index could be increased to 0.055. How much would the yield increase, and how would the investment recommendation change? 3. Refer again to the original situation, in which the client's risk index was assessed to be 0.05. How would your investment recommendation change if the annual vield for the growth fund were revised downward to 16% or even to 14%? 4. Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? 5. The asset allocation model you developed may be useful in modifying the portfo- lios for all of the firm's clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible? CASE PROBLEM. INVESTMENT STRATEGY J. D. Williams, Inc. is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that rec- ommends the portion of each client's portfolio to be invested in a growth stock fund, an income fund, and a money market fund. To maintain diversity in each client's portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund mus be between 20% and 40% of the total portfolio value. Similar percentages for the other funds stipulate that between 20% and 50% of the total portfolio value must be in the in fund and that at least 30% of the total portfolio value must be in the money market Case Problem: Investment Strategy 605 In addition, the company attempts to assess the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, w tracted with a new client who has se e individual investor. For example, Williams just con- t invest Based on an evaluation of risk tolerance, Williams assigned a maximum risk index of 0.05 for the che O to invest. Based on an evaluation of the client's risk indicators show the risk of the growth fund a maximum risk index of 0.05 for the client. The firm's the income fund at 0.07, and the money market fund at 0.01. An overall portfolio risk index is computed as a age of the risk rating for the three funds, where the weights are the fraction of ortfolio risk index is computed as a weighted aver- portfolio invested in each of the funds. aree funds, where the weights are the fraction of the client's Additionally, Williams is currently forecasting annual vields of 18% for the growth fund, 12.5% for the income fund and 7 50 for the money market fund. Based on the infor mation provided, how should the new client be advised to allocate the $800,000 among the growth, income, and money market funds? Develop a linear programming model that will provide the maximum yield for the portfolio. Use your model to develop a managerial report. Managerial Report 1. Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation? 2. Assume that the client's risk index could be increased to 0.055. How much would the yield increase, and how would the investment recommendation change? 3. Refer again to the original situation, in which the client's risk index was assessed to be 0.05. How would your investment recommendation change if the annual vield for the growth fund were revised downward to 16% or even to 14%? 4. Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? 5. The asset allocation model you developed may be useful in modifying the portfo- lios for all of the firm's clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible