INVESTMENT STRATEGY REPORT
Submitted to J. D. Williams, Inc.
By
Mizar Gonzalez
Industrial Engineering Department
Southern Polytechnic State university
404-519-2792
February 20, 2008
EXECUTIVE SUMMARY
This report is our recommendation for an optimal investment strategy that would allow J. D. Williams, Inc. to maximize the annual yield of an investment of $800,000 in a diversified portfolio of funds. To find the investment that would result in the greatest annual yield we have formulated a linear program that takes into account the requirements for the client of J. D. Williams, Inc. The requirements for the investment portfolio can be found on the section titled “Problem Description” The greatest annual*…show more content…*

The client will realize an annual yield on the $800,000 investment of $94,133.33 if it is allocated in the following manner. The amount to be invested in the growth fund must be $ 248,889. The income fund must have an investment of $ 160,000 and the money market fund must have an investment of $ 391, 112. The solution is not surprising given the requirements for the investments. The amount invested in the growth fund yields the greatest revenue but has to be less than 50% of the total investment and is also limited by its high risk index. The amount is greatest when invested in the money market fund because it balances the greater risk the other funds are subjected to. Problem answers If the client’s risk index was increased to.055 the investment would be affected in the following manner. The optimal solution becomes $ 98, 800 and the funds would be allocated in the following manner: Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. If the original problem is consulted and the annual yield of growth fund is downgraded to 16% the optimal solution would change to $92, 934 with the funds invested in the following manner. Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. The yield of the growth fund still justifies having a large amount of the portfolio

The client will realize an annual yield on the $800,000 investment of $94,133.33 if it is allocated in the following manner. The amount to be invested in the growth fund must be $ 248,889. The income fund must have an investment of $ 160,000 and the money market fund must have an investment of $ 391, 112. The solution is not surprising given the requirements for the investments. The amount invested in the growth fund yields the greatest revenue but has to be less than 50% of the total investment and is also limited by its high risk index. The amount is greatest when invested in the money market fund because it balances the greater risk the other funds are subjected to. Problem answers If the client’s risk index was increased to.055 the investment would be affected in the following manner. The optimal solution becomes $ 98, 800 and the funds would be allocated in the following manner: Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. If the original problem is consulted and the annual yield of growth fund is downgraded to 16% the optimal solution would change to $92, 934 with the funds invested in the following manner. Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. The yield of the growth fund still justifies having a large amount of the portfolio

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