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I HAVE ADDED ALL INFORMATION GIVEN. PLEASE HELP Questions 1. O 4 Question 3 of5 D Blair & Rosen, Inc. (B&R) is a brokerage firm
I HAVE ADDED ALL INFORMATION GIVEN. PLEASE HELP
Questions 1. O 4 Question 3 of5 D Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specic risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $50,000 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 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 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 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. Max V .18 I + .08 B 5.t. 50000 Available investment funds 25000 Maximum investment in the internet fund 230 Maximum risk for a moderate investor 1,8 0 (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 = 3; What is the annual return for the portfolio? $ (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 $50,000 to invest has been classied as an aggressive investor. B&R 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 classified as a conservative investor. B&R 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 Return = $ on [can KeyStep by Step Solution
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