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Innis Investments manages funds for a number of companies and wealthy clients. The investment strategy is tailored to each client's needs. each unit of the
Innis Investments manages funds for a number of companies and wealthy clients. The investment strategy is tailored to each client's needs. each unit of the money market fund costs $100 and provides an annual rate of return of 4%. The clent wants to minimize risk subject to the requirement that the annual income from the investment be at least $60,000. fund simply indicates that it is the riskier investment. Innis's client also specified that at least $300,000 be invested in the money market fund. Refer to the computer solution shown below. (a) Suppose the risk index for the stock fund (the value of CS ) increases from its current value of 8 to 10. How does the optimal solution change, if at all? The optimal solution becomes (9600,3000). The optimal solution does not change. (b) Suppose the risk index for the money market fund (the value of CM ) increases from its current value of 3 to 4.5. How does the optimal solution change, if at all? The optimal solution becomes (9600,3000). The optimal solution does not change. (c) Suppose CS increases to 10 and CM Increases to 4.5. How does the optimal solution change, If at all? The optimal solution becomes (9600,3000). The optimal solution does not change
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