General Management - Investment - Case Study Example

4 ) Assuming that the client expressed some concern about having too much money in the growth fund, how would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? 5 ) Is the asset allocation model that I developed will be useful in managing the portfolio for all of the firm’s clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible?

The objective of managing the funds of all the clients is to maximize the annual yields of their portfolio given their risk preferences. However it is not possible to use exactly the same linear programming model because the different clients have different risk preferences and risk indexes. The different linear programming models will have different set of constraints in spite of having the same objective. However if the annual yields for the three funds are periodically revised then the model is useful.

The coefficients of the objective constraint can simply be changed to reflect the new yields of the three