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Blair Rosen, Inc. is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients.

Blair & Rosen, Inc. is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B& R this past week has a maximum of $50,000 to invest. The Internet fund, which is the more risky of the two investment alternatives, has a risk rating of 6 per thousand dollars invested. The Blue Chip fund has a risk rating of 4 per thousand dollars invested. For example, if $10,000 is invested in each of the two investment funds, B & R's risk rating for the portfolio would be 6(10) + 4(10) = 100. Finally, B & R developed a questionnaire to measure each client's risk tolerance. Based on the responses, each client is classified as a conservative, moderate, or aggressive investor. B& R recommends that a client who is a moderate investor limit his or her portfolio to a maximum risk rating of 240. a. What is the recommended investment portfolio for this client? What is the annual return for the portfolio?

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