passage below require analyis and breakdown

Since I am a younger professional with no house bills to worry about just yet, I have a portfolio with more risk to try and gain more money. I have chosen to invest in the market in its current state with the hopes that it is going to double my money once things start to normalize with this pandemic and the economic state. Anderson (2016) states that "Haucks portfolio manager would like to also construct a portfolio for clients who are willing to accept a moderate amount of risk in order to attempt to achieve better returns. Suppose that clients in this risk category are willing to accept some risk, but do not want the annual return for the portfolio to drop below 2%. By setting in the minimum return constraints in the maximin model, we can constrain the model to provide a solution with an annual return of at least 2%. The minimum return constraints needed to provide an annual return of at least 2%" (Anderson, 2016).

Now knowing how to construct a portfolio with a minimum return constraints, this could create different scenarios that could potentially yield a large percent of return, while also not falling below the return rate minimum that I will set. by manipulating the return rate minimum, you then could construct a portfolio based on how much risk you are willing to take on. if we are able to take a loss of money, this could mean that we are able to be more risky with out money. Anderson states that "other constraints may be added to portfolio models to make them more flexible. for instance, if a client wanted to have at least 10% of the portfolio invested in foreign stocks, we would add the constraint to either the maximin or moderate risk portfolio models" (Anderson, 2016). to increase the risk of a portfolio one could solely invest in one stock. this could cause a great fall in return if the organization does not do well. to decrease the risk, placing your money in multiple stocks allows for diversification to ensure that your money can still be placed in risky stocks but will do better spread throughout. I will make sure that I use the minimum return constraints but also diversify to ensure safety with my money placement.