Use the Table Below to Answer the Following Questions) The Company Recommends That No More Than $300,000 Be Invested

question 3

Multiple Choice

Use the table below to answer the following questions) .
Qualis Investments is a private limited business that manages personal financial portfolios. The company manages six mutual funds and has a client that has acquired $750,000 from an inheritance. Characteristics of the funds are given in the table below. $\begin{array}{|c|l|c|c|}\hline & \text { Qualis Mutual Fund Data } & & \\\hline & & \begin{array}{c}\text { Expected Annual } \\\text { Return }\end{array} & \text { Risk Measure } \\\hline 1 & \text { Qualis Low-priced Stock Fund } & 7.23 \% & 11.87 \\\hline 2 & \text { Qualis Multinational Fund } & 8.42 \% & 12.62 \\\hline 3 & \text { Qualis Mid-cap Stock Fund } & 6.66 \% & 13.72 \\\hline 4 & \text { Qualis Mortgage Fund } & 2.72 \% & 3.37 \\\hline 5 & \text { Qualis Income Equity Fund } & 8.89 \% & 8.4 \\\hline 6 & \text { Qualis Balanced Fund } & 3.50 \% & 6.91 \\\hline\end{array}$ The company recommends that no more than $300,000 be invested in any individual fund, and that at least $80,000 be invested in each of the mid-cap stock and mortgage fund. The total amount invested in the low-priced and multinational funds are at least 35% of the total investment. The client would like an average return of at least 6%. Assume that X1- X6 represent the dollar amounts invested in funds 1 through 6, respectively.
-Which of the following is the constraint for the weighted return?

• A) X1 + X2 + X3 + X4 + X5 + X6 = 750,000
• B) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 ? 6.00
• C) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 / 750,000 ? 6.00
• D) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 / 750,000

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Definitions:

Normally Distributed

A statistical term describing a distribution of data where most of the observations cluster around the mean, forming a bell-shaped curve.

Annual Return

The percentage change in the value of an investment over a one-year period, including dividends, interest, and capital gains.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from their mean.

Dividend Yield

The dividend per share divided by the price per share, indicating how much a company pays out in dividends each year relative to its stock price.