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:

Straightforward Statement

A clear and unambiguous expression or declaration that is easy to understand and interpret.

Direct Approach

A straightforward method of communication or problem-solving that involves dealing with issues openly and explicitly.

Positive Messages

Communications that convey good news, affirmative updates, or positive feedback, often used to build morale or reinforce good behavior.

Neutral To Receptive

The process of changing an audience's attitude from indifferent or uninterested to positive and open-minded.