A Financial Planner Wants to Design a Portfolio of Investments

question 85

Essay

A financial planner wants to design a portfolio of investments for a client. The client has $400,000 to invest and the planner has identified four investment options for the money. The following requirements have been placed on the planner. No more than 30% of the money in any one investment, at least one half should be invested in long-term bonds which mature in six or more years, and no more than 40% of the total money should be invested in B or C since they are riskier investments. The planner has developed the following LP model based on the data in this table and the requirements of the client. The objective is to maximize the total return of the portfolio. ​ ​ ​ What values would you enter in the Analytic Solver Platform (ASP) task pane for the following cells for this Excel spreadsheet implementation of this problem?
Objective Cell:
Variables Cells:
Constraints Cells:

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Definitions:

Fundamental Conditions

Essential circumstances or factors that underlie and determine the nature of an environment, system, or situation.

Creative Potential

The capacity to generate original ideas, approaches, or solutions that are both novel and useful in a particular context.

Creative Process

A series of steps taken to develop and produce innovative ideas or solutions.

Four Stages

A general term that can refer to any process, development, or cycle that is characterized by four distinct phases or parts.