Portfolio Manager Max Gaines Needs to Develop an Investment Portfolio

question 38

Essay

Portfolio manager Max Gaines needs to develop an investment portfolio for his clients who are willing to accept a moderate amount of risk. His task is to determine the proportion of the portfolio to invest in each of the five mutual funds listed below so that the portfolio provides an annual return of no less than 3%. Formulate the appropriate linear program.
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Definitions:

Cognitive Psychologist

A professional who studies mental processes such as perception, memory, thought, and problem-solving to understand how people process and store information.

Developmental Psychologist

A developmental psychologist studies how people grow, change, and face challenges throughout their lifespan, from infancy to old age.

Physiological Psychologist

A specialist who studies the biological basis of behavior, focusing on the physical and chemical processes occurring in the nervous system.

Empirically Based

Pertains to practices, theories, or approaches that are supported by observable and measurable evidence, often through scientific research and experimentation.