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Based on this week's readings (from Chapter 12 in the course text), address the following scenario...

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Finance

Based on this week's readings (from Chapter 12 in the coursetext), address the following scenario and answer the questions:Lymann Brothers has a substantial number of clients who wish to owna mutual fund portfolio that closely matches the performance of theS&P 500 stock index. A manager at Lymann Brothers has selectedfive mutual funds that will be considered for inclusion in theportfolio. The manager must decide what percentage of the portfolioshould be invested in each mutual fund. Annual Returns (PlanningScenarios) Mutual Fund Year 1 Year 2 Year3 Year 4 InternationalStock 25.64 27.62 5.80 −3.13 Large-Cap Blend 15.31 18.77 11.06 4.75Mid-Cap Blend 18.74 18.43 6.28 −1.04 Small-Cap Blend 14.19 12.37−1.92 7.32 Intermediate Bond 7.88 9.45 10.56 3.31 S&P 500 13.0012.00 7.00 2.00 Minimize the variance of the portfolio subject toconstraints on the expected return, assuming that Lymann Brothers'client requires the expected portfolio return to be at least 9percent.

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We are given the following information Mutual Fund Type Year 1 Year 2 Year 3 Year 4 International Stock 02564 02762 0058 00313 Large Cap Blend 01531 01877 01106 00475 Mid Cap Blend 01874 01843 00628 00104 Small Cap Blend 01419 01237 00192 00732 Intermediate Bond 00788 00945 01056 00331 SP 500 Stock Index 013 012 007 002 We are required to find out the optimal portfolio of these    See Answer
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