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A Financial Planner Wants to Design a Portfolio of Investments

question 21

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. 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.   ​ Formulate the LP for this problem.
Formulate the LP for this problem.


Definitions:

Individualism View

A perspective emphasizing personal independence and the importance of individual self-reliance and freedom.

Business Practice

Conventional or customary commercial procedures and operations.

Pushing the Law

refers to the act of attempting to extend or apply legal boundaries and rules to their limits, often for strategic or advocacy purposes.

Procedural Justice

The fairness of the processes that lead to outcomes or decisions, fostering a sense of justice based on transparency, consistency, and impartiality.

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