Portfolio Manager Max Gaines Needs to Develop an Investment Portfolio

Portfolio manager Max Gaines needs to develop an investment portfolio for his clients who are willing to accept a moderate amount of risk.His task is to determine the proportion of the portfolio to invest in each of the five mutual funds listed below so that the portfolio provides an annual return of no less than 3%.Formulate the appropriate linear program. $$\begin{array} { c | r r r r } & { \text { Annual Returns (Planning Scenarios) } } \\\text { Mutual Fund } & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Year 4 } \\\hline \text { International Stock } & 22.37 & 26.73 & 6.46 & - 3.19 \\\text { Large-Cap Blend } & 14.88 & 18.61 & 10.52 & 5.25 \\\text { Mid-Cap Blend } & 19.45 & 18.04 & 5.91 & - 1.94 \\\text { Small-Cap Blend } & 13.79 & 11.33 & - 2.07 & 6.85 \\\text { Intermediate Bond } & 7.29 & 8.05 & 9.18 & 3.92\end{array}$$

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free