Please help with the empty boxes below: Thank you! Blair & Rosen, Inc. (B&R;) is
ID: 454530 • Letter: P
Question
Please help with the empty boxes below: Thank you!
Blair & Rosen, Inc. (B&R;) 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 $SO.OOO 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%, while the Blue Chip fund has a projected annual return of 9%. The investment advisor requires that at most $3S,COO 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 SIO.OCO is invested in each of the two investment funds, B&R;'s risk rating for the portfolio would be 6(10) + 4(1C) - IOC. Finally, B&R; developed a questionnaire to measure each 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. B&R; recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 240. Formulate a linear programming model to find the best investment strategy for this client. Let 1 - Internet fund investment in thousands 8 - Blue Chip fund investment in thousands If required, round your answers to two decimal places.Explanation / Answer
Maximize 0.12I + 0.09B
I+B 50000;
I 35000;
(6/1000)*I + (4/1000)*B 240
0.006I +0.004B 240