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 yield that can be expected while subject to the requirements of the different funds and the prospective client is $94,133.33. The money has to be invested in the following manner to achieve this result: 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.
PROBLEM DESCRIPTION
J. D. Williams, Inc. has a client who wishes to invest $800,000 with the firm in order to maximize his yield after a period of one year. The firm wants to allocate the funds while accommodating some requirements related to portfolio composition and the risk index of the funds as well as the client.
The portfolio must have investments in 3 funds: a growth fund, an income fund, and a money market fund. There are also several requirements as to the composition of the investment. There are also sever ...