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Your company Babylon LLC manages funds for corporates and wealthy individuals. Your company takes pride in the fact that each investment strategy is tailored to
Your company Babylon LLC manages funds for corporates and wealthy individuals. Your company takes pride in the fact that each investment strategy is tailored to the clients needs. For a new client you have been authorized to invest $ USD in two investment funds a stock fund and a money market fund. Each unit in the stock fund costs $ with an expected annual return of Each unit in the money market fund costs $ with an expected annual return of Due to the present market conditions your client is keen on minimizing risk but also earn $ in returns. According to your inhouse risk measurements each unit purchased in the stock index has a risk measurement of and each unit purchased in the money market fund has a risk measurement of Due to the high risk associated with the stock fund the client has asked you to invest at least $ in the money market fund. As a portfolio manager at Babylon design a portfolio for your client with the minimum risk exposure.
A Formulate the problem
B Show how to solve the problem in EXCEL
C Fill out the recommendation: Based on the Excel results, to minimize risk you should recommend to have units of the stock fund and units of the money market fund in the clients portfolio. With this plan from you the portfolio has a minimum risk measurement of
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