Question: 1 . Your first task is to decide how much you want to invest in four of the 6 stocks. You have two bundles you

1 .

Your first task is to decide how much you want to invest in four of the

6

stocks. You have two bundles you could invest in Bundle

1

should include stock ABCD, bundle

2

should include ABEF that will minimize her risk measured by the variance of the return from the portfolios of each bundle while making sure that the expected return is at least as large as her choice of a minimum acceptable value.

.

For each of these bundles, using NLP

,

develop an efficient frontier and discuss what it means.

.

If you do not want to invest more than

40 %

in any one stock what, what would you recommend they invest in

?

.

.

what percentage of each stock will you recommend they invest in and why.?

.

For a new graduate who just finished school, what would you recommend they invest in

?

.

.

what percentage of each stock will you recommend they invest in and why.

.

For someone who just retired at age

70,

what would you recommend they invest in

?

.

.

what percentage of each stock will you recommend they invest in and why?

.

Do you see any problems or disadvantages with this approach to investing?

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