A retired partner from Goldman Sachs has 1 million dollars available to invest in particular stocks or bonds. Each investment’s annual rate of return depends on the state of the economy in the coming...

A retired partner from Goldman Sachs has 1 million dollars available to invest in particular stocks or bonds. Each investment’s annual rate of return depends on the state of the economy in the coming year. The file P10_69.xlsx contains the distribution of returns for these stocks and bonds as a function of the economy’s state in the coming year. This investor wants to allocate her $1 million to maximize her expected total return 1 year from now.


a.  If X= Y =15% (see the file), find the optimal investment strategy for this investor.


b.  For which values of X (where 10% <><><><>

c.  For which values of X (where 10% <><><><>