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You are an investment advisor and are asked to construct an optimal portfolio of fifteen stocks for your client. After having considered the requirements of
You are an investment advisor and are asked to construct an optimal portfolio of fifteen stocks for your client. After having considered the requirements of the client, you decided to apply the following constraints: (a) Min-Max constraint (b) Box constraint (c) Return constraint and (d) Diversification constraint with the objective of minimizing the risk measured by VaR. (6+3=9Marks) 1. Explain the objective and each of the above constraints 2. Explain the steps involved in the construction of optimal portfolio
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