Suppose a client tells his portfolio manager the conditions of his $16.8 million fund to be invested are: 1. A need for a minimum return of 12.25% per annum; 2. A horizon date of 6 years; and 3. A YTM...

Suppose a client tells his portfolio manager the conditions of his $16.8 million fund to be invested are:

1. A need for a minimum return of 12.25% per annum;

2. A horizon date of 6 years; and

3. A YTM based on default and call free government bonds of 15.4%.

Suggest a strategy for managing the clients’ investment subject to all his conditions above.