J. D. Williams, Inc. is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that rec¬ommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund, and a money market fund. To maintain diversity in each client’s portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund must be between 20 and 40 percent of the total portfolio value. Similar percentages for the other two funds stipulate that between 20 and 50 percent of the total portfolio value must
be in the income fund and that at least 30 percent of the total portfolio value must be in the money market fund.
In addition, the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, Williams just con¬tracted with a new client who has $800,000 to invest. Based on an evaluation of the client’s risk tolerance, Williams assigned a maximum risk index of 0.05 for the client. The firm’s risk indicators show the risk of the growth fund at 0.10, the income fund at 0.07, and the money market fund at 0.01. An overall portfolio risk index is computed as a weighted aver¬age of the risk rating for the three funds, where the weights are the fraction of the client’s portfolio invested in each of the funds.
Additionally, Williams is currently forecasting annual yields of 18 percent for the growth fund, 12.5 percent for the income fund, and 7.5 percent for the money market fund. Based on the information provided, how should the new client be advised to allocate the $800,000 among the growth, income, and money market funds? Develop a linear program¬ming model that will provide the maximum yield for the portfolio. Use your model to develop a managerial report.
1. Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation?
2. Assume that the client’s risk index could be increased to 0.055. How much would the yield increase, and how would the investment recommendation change?
3. Refer again to the original situation where the client’s risk index was assessed to be 0.05. How would your investment recommendation change if the annual yield for the growth fund were revised downward to 16 percent or even to 14 percent?
4. Assume 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. The asset allocation model you developed may be useful in modifying the portfolios for all of the firm’s clients whenever the anticipated yields for the three funds are periodi¬cally revised. What is your recommendation as to whether use of this model is possible?
• Apply statistical analysis tools to evaluate data
• Interrupt statistical results, apply to decision-making, argue a decision, and write a report
Keep in mind the structure of your written report as it is critical. All reports begin with an introduction to the case. In it you outline briefly what the company does, how it developed historically, what problems it is experiencing, and how you are going to approach the issues addressing the questions at the end of the case. Do this sequentially by writing, for example, “First, we discuss the environment of Company X…Third, we discuss Company X’s business-level strategy… Last, we provide recommendations for turning around Company X’s business.”
Make sure you use plenty of headings and subheadings to structure your analysis. For example, have separate sections on any important conceptual tool you use. Thus, you might have a section on Porter’s five forces model as part of your analysis of the environment. You might offer a separate section on portfolio techniques when analyzing a company’s corporate strategy. Tailor the sections and subsections to the specific issues of importance in the case.
In the third part of the case write-up, present your solutions and recommendations. Be comprehensive, and make sure they are in line with the previous analysis so that the recommendations fit together and move logically from one to the next. The recommendations section is very revealing because it shows how much work you put into the case from the quality of your recommendations.
Your paper is to be written in 6th edition APA formatting, and should be no less than 5 pages in length (excluding cover and reference page). Also, you should use at least 2 academic references to support your analysis and critical thinking.
At 111papers.com, we value all our customers, and for that, always strive to ensure that we deliver the best top-quality content that we can. All the processes, from writing, formatting, editing, and submission is 100% original and detail-oriented. With us, you are, therefore, always guaranteed quality work by certified and experienced writing professionals. We take pride in the university homework help services that we provide our customers.
As the best homework help service in the world, 111 Papers ensures that all customers are completely satisfied with the finished product before disbursing payment. You are not obligated to pay for the final product if you aren’t 100% satisfied with the paper. We also provide a money-back guarantee if you don’t feel that your paper was written to your satisfaction. This guarantee is totally transparent and follows all the terms and conditions set by the company.Read more
All products that we deliver are guaranteed to be 100% original. We check for unoriginality on all orders delivered by our writers using the most advanced anti-plagiarism programs in the market. We, therefore, guarantee that all products that we submit to you are 100% original. We have a zero-tolerance policy for copied content. Thanks to our strict no plagiarized work rule, you can submit your homework to your professor without worrying.Read more
TThis is one of the most cherished courtesy services that we provide to help ensure that our customers are completely satisfied with our finished products. Delivering the best final product to our customers takes multiple inputs. 111papers.com prides itself on delivering the best university homework help services in the writing industry. And, in part, our free revision policy is how we do it. What’s more, all our revisions are 100% free without any strings attached.Read more
Client privacy is important to use. We know and understand just how important customers value their privacy and always want to safeguard their personal information. Thus, all the information that you share with us will always remain in safe custody. We will never disclose your personal information to any third party or sell your details to anyone. 111 Papers uses the most sophisticated, top-of-the-line security programs to ensure that our customers’ information is safe and secured.Read more
Placing your order with us means that you agree with the homework help service we provide. We, in turn, will endear to ensure that we do everything we can to deliver the most comprehensive finished product as per your requirements. We will also count on your cooperation to help us deliver on this mandate. Yes, we also need you to ensure that you have the highest-quality paper.Read more