The Investment Problem of PP
You, the Portfolio Manager of Pension Planners (PP),
have been asked to invest $1,000,000. The Research
Department has identified six different mutual funds
(each mutual fund is a collection of stocks of many
companies) with varying investment strategies resulting
in the different potential returns and risk categories
given in the following table:
Fund 1 2 3 4 5 6
Price ($/share) 45 78 110 17 23 22
Return (%) 30 20 15 12 10 7
Risk Category High High High Med Med Low