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Please help me! Due at Midnight! I will like correct responses! Innis Investments manages funds for a number of companies and wealthy clents. The imvertment
Please help me! Due at Midnight! I will like correct responses!
Innis Investments manages funds for a number of companies and wealthy clents. The imvertment strategy is tallored to each clent's needs, for a new dient, Innis has been authorized to invest up to $1.2 milion in two investment funds: a stock fund and a meney market fund. Each unit of the stock fund cests $50 and provides an annual rate of retum of 10%; each unit of the money market fund costs $100 and provides an annuat rate of return of 4%. The dient wants to minimize risk subject to the requirement that the annual income from the investment be at least $63,000, According so Innis' risk measurement system, each unit inveted in the stock fund has a risk index of 19, and each unit invested in the money market fund has a risk index of 7 ; the higher risk. index associated with the stock fund simply. indicates that it is the riskier investment. Innis's client also specified that at least $550,000 be invested in the money market fund. (o) Determine how many units of each fund Innis should purchase for the client to minimize vhe total risk index for the portfolio. (Assume S is the number of units purchased in the stock fund and M is the number of units purchased in the money market fund.) (S,M)=( (b) How much annusi income (in dollars) will this imvestment strategy generate? 1 (c) Suppose the dient desires to maximize annual return and no longer requires that s5so, oco be invested in the money market fund. How should the funds te imvetted? Invest haif in the stock fund and half in the money market fond. Imvest everything in the stock fund. Invest everything in the money maknet fund Step by Step Solution
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