MUTUAL "FUN" MODELING!! - The table below depicts the attributes of 10 mutual funds that you have chosen for investment of your client's money. She has $100,000 to invest, though you do not have to invest it all (Warren Buffet doesn't tie up all of his money either!). Attributes: 1) A Measure of the riskiness of the fund (low is better than high). 2) Investment Category (STOCK, BAL(auces), INTL, BOND) 3) Investment Company (VAN, FID, JPM, TRP) 4) RETI - anticipated annual return under market conditions "Election Results 1" 5) RET2 - anticipated annual retum under market conditions "Election Results 2 6) RET3 - anticipated annual retum under market conditions "Election Results 3" 7) Green - a measure of how 'green' the companies in which the fund investa 8) Social - a measure of how the funds are invested in socially conscious companies. 181 181 271 Type STOD STOOK BOND BAL INTL BOND STOCK Company VAN 0.023 0. 0.071 Risk Measure 12 31 BAL 1.71 INTL FD NTL VAN VAN JPM JPM RP FID 000 0123 FID 00 0.045 0. 122 007 0.137 0.151 0.212 QWE RET2 RET Green Soda 0.117 004 3 QOT 0247 0023 55 38 S 4 3 6 75 65 3.2 1 3 52 Invest the model optimally (minimizing risk-amount invested in a fund times the risk measure) such that. a) Under market conditions RET1 and RET3, the model shows no loss. b) Under market conditions RET2, there is a return of at least $14,000. (This is a number). c) No more than 40% of the funds invested can be with any one company. d) At least 10% of the invested funds must be with each company. e) No more than 40% of the funds invested can be with any one investment category. f) At least 10% of the invested funds must be within each investment category. The invested funds must average at least 5.0 on the green measure. h) The invested funds must average at least 4.75 on the social measure. 1) Investments must be in integer dollars. Create and solve an LP model that addresses this investment situation. Keep in mind we do not Imow in advance how much the model will decide to invest - it will be between $0 and $100,000. Only the model kowse. Follow up: The model may decide not to invest in every fund. Re-run the analysis with a requirement that each fund must have at least 2.5% of the total money invested allocated Compare how this solution alters the original solution. MUTUAL "FUN" MODELING!! - The table below depicts the attributes of 10 mutual funds that you have chosen for investment of your client's money. She has $100,000 to invest, though you do not have to invest it all (Warren Buffet doesn't tie up all of his money either!). Attributes: 1) A Measure of the riskiness of the fund (low is better than high). 2) Investment Category (STOCK, BAL(auces), INTL, BOND) 3) Investment Company (VAN, FID, JPM, TRP) 4) RETI - anticipated annual return under market conditions "Election Results 1" 5) RET2 - anticipated annual retum under market conditions "Election Results 2 6) RET3 - anticipated annual retum under market conditions "Election Results 3" 7) Green - a measure of how 'green' the companies in which the fund investa 8) Social - a measure of how the funds are invested in socially conscious companies. 181 181 271 Type STOD STOOK BOND BAL INTL BOND STOCK Company VAN 0.023 0. 0.071 Risk Measure 12 31 BAL 1.71 INTL FD NTL VAN VAN JPM JPM RP FID 000 0123 FID 00 0.045 0. 122 007 0.137 0.151 0.212 QWE RET2 RET Green Soda 0.117 004 3 QOT 0247 0023 55 38 S 4 3 6 75 65 3.2 1 3 52 Invest the model optimally (minimizing risk-amount invested in a fund times the risk measure) such that. a) Under market conditions RET1 and RET3, the model shows no loss. b) Under market conditions RET2, there is a return of at least $14,000. (This is a number). c) No more than 40% of the funds invested can be with any one company. d) At least 10% of the invested funds must be with each company. e) No more than 40% of the funds invested can be with any one investment category. f) At least 10% of the invested funds must be within each investment category. The invested funds must average at least 5.0 on the green measure. h) The invested funds must average at least 4.75 on the social measure. 1) Investments must be in integer dollars. Create and solve an LP model that addresses this investment situation. Keep in mind we do not Imow in advance how much the model will decide to invest - it will be between $0 and $100,000. Only the model kowse. Follow up: The model may decide not to invest in every fund. Re-run the analysis with a requirement that each fund must have at least 2.5% of the total money invested allocated Compare how this solution alters the original solution