A Financial Advisor Is About to Build an Investment Portfolio

question 83

Essay

A financial advisor is about to build an investment portfolio for a client who has $100,000 to invest.The four investments available are A,B,C,and D.Investment A will earn 4 percent and has a risk of two "points" per $1,000 invested.B earns 6 percent with 3 risk points;C earns 9 percent with 7 risk points;and D earns 11 percent with a risk of 8.The client has put the following conditions on the investments: A is to be no more than one-half of the total invested.A cannot be less than 20 percent of the total investment.D cannot be less than C.Total risk points must be at or below 1,000.
Let A be the amount invested in investment A,and define B,C,and D similarly.
Formulate the linear programming model.

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Definitions:

Sense Of Trust

A feeling of confidence in the reliability and integrity of a person or thing, which is fundamental to healthy relationships and personal development.

First Year

The initial period of twelve months or the introductory stage of various endeavors or experiences, often marked by rapid learning and development.

Primary Caregiver

The main person responsible for providing care and meeting the needs of a child or dependent, often a parent or guardian.

Attachment Phase

A crucial period in early child development where a young child forms emotional bonds, usually with their caregivers.