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thank you! 3lair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfollos designed to meet the specific risk tolerances of its
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3lair \& Rosen, Inc. (B\&R) is a brokerage firm that specializes in investment portfollos designed to meet the specific risk tolerances of its clients. A client who contacted B8R 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 12%, and the Blue Chip fund has a projected annual return of 9\%. The investment advisor requires that at most $35,000 of the client's funds should be invested in the internet fund. B8R 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 dollors invested. The Blue Chip fund has a risk rating of 4 per thousand dollars invested. For example, it $10,000 is invested in each of the two investment funds, B8R's risk rating for the portfolio would be 6(10)+4(10)=100. Finally, Bsq developed a questionnaire to measure cach client's risk tolerance. Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. Suppose that the questionnaire results classified the current client as a moderate investor, BSR. recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 240 . (a) Formulate a linear programming model to find the best investment strategy for this client. Let I= Internet fund investment in thousands B - Blue Chip fund investment in thousands If required, round your answers to two decimal places. If the constant is 1 it must be entered in the bax. If your answer is zero enter "0". Formulate a linear programming model to find the best investment strategy for this client, Let I= Internet fund investment in thousands B = Blue Chip fund investment in thousands If required, round your answers to two decimal places. If the constant is " 1 " it must be entered in the box. If your answer is zero enter " 0 ". (b) Bulld a spreadsheet model and solve the problem using Solver. What is the recommended investment portfolio for this client? Internet Fund =$ Blue Chip Fund =5 What is the annual return for the portfolio? (c) Suppose that a second client with $50,000 to invest has been classified as an aggressive investor. B8R recommends that the maximum partfolio risk rating for an aggressive investor is 320 . What is the recommended investment portfolio for this aggressive investor? Internet Fund = s Blue Chip Fund =51 What is the annual return for the portfolio? (c) Suppose that a second client with $50,000 to invest has been classified as an aggressive investor. BsR-recommends that the maximum portfolio nisk rating for an aggressive investor is 320 . What is the recommended investment portfolio for this aggressive investor? Internet Fund =$ Blise Chip Fund =$5 Mnnual Return =$3 (d) Suppose that a third client with $50,000 to invest has been ciassified as a conservative investor, Bsa recommends that the maximum portfolio risk rating for a conservative investor is 160 . Develop the recommended investment portfolio for the conservative investor. If your answer is zero enter "0 Step by Step Solution
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