Blair Rosen Inc Br Is A Brokerage Firm That Specializes In Investment Portfolios Designed To Meet The Specific Ri 1 (39.81 KiB) Viewed 25 times
Blair Rosen Inc Br Is A Brokerage Firm That Specializes In Investment Portfolios Designed To Meet The Specific Ri 2 (22.04 KiB) Viewed 25 times
Blair & Rosen, Inc. (BR), is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $55,000 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 8%, whereas the Blue Chip fund has a projected annual return of 7%. The investment advisor requires that at most $40,000 of the client's funds should be invested in the Internet fund, B&R 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 dollars invested. The Blue Chip fund has a risk rating of 4 per thousand dollars invested. For example, if $10,000 is invested in each of the two investment funds, BBR's risk rating for the portfolio would be 6(10) + 4(10) = 100. Finally, B&R 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 dient as a moderate investor B recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 260. (a) Formulate a linear programming model to find the best investment strategy for this client. (Assume is the amount invested in the internet fund project and B is the amount invested in the Blue Chip fund, texpress the amounts invested in thousands of dollars.) Max st Available investment funds Maximum investment in the internet fund Maximum risk for a moderate investor N, 80 (b) Build a spreadsheet model and solve the problem using Excel Solver. What is the recommended investment portfolio in dollars) for this client? Internet und $ blue chip fund $ What is the annual return (in dollars) for the portfolio? $
(b) Build a spreadsheet model and solve the problem using Excel Solver. What is the recommended Investment portfolio (in dollars) for this client? internet fund $ blue chip fund $ What is the annual return (in dollars) for the portfolio? (b) Suppose that a second client with $55,000 to invest has been classified as an aggressive investor, B&R recommends that the maximum portfolio risk rating for an aggressive investor is 300. What is the recommended investment portfolio (in dollars) for this aggressive investor? internet fund $ blue chip fund $ (d) Suppose that a third client with $55,000 to invest has been classified as a conservative investor. B&R recommends that the maximum portfolio risk rating for a conservative investor is 180. Develop the recommended investment portfolio (in dollars) for the conservative investor internet fund $ blue chip fund $
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