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Business, 05.05.2020 08:21 jay7176

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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 maximizes the expected return but provides an annual return of no less than 3%.

for each of the following scenarios. Annual Returns (Planning Scenarios):

Mutual Fund Year 1 Year 2 Year 3 Year 4
International Stock 22.37 26.73 6.46 -3.19
Large-Cap Blend 14.88 18.61 10.52 5.25
Mid-Cap Blend 19.45 18.04 5.91 -1.94
Small-Cap Blend 13.79 11.33 -2.07 6.85
Intermediate Bond 7.29 8.05 9.18 3.92

Formulate the appropriate linear program for this situation.

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