STRATEGIC ASSET MANAGEMENTAssignment for Topic 3 (100 points)The Impact of Income Risk on Financial DecisionsYou are advisingtwo clients about making an initial investment in a U.S. stock market fund and a money market fund(i.e., risk free alternatives). Both of them have250Kin savings and their annual salary is120K.They want you to manage their savings for a year, that is, the investment horizon is only one year.Your task is to make a recommendation about how much they should invest in each fund for the one-year period.As part of your portfolio recommendation, you want to take into account theiroccupation or human-capital risk.Specifically, one of them works in theUTILITIESindustry and the other one works in theCONSTRUCTIONindustry. Toassess their occupation risk, you gatheredreturn data for theUTILandCNSTRsectors. Fluctuations in the industryreturns can be a good proxy for occupation risk.While meeting with your clients, you found out that they arereasonably risk averse and their behavior can be describedby theCRRA preferences:C1−γ1−γ,γ>1.Assume that the coefficient of relative risk aversion (γ) is6.Prepare a short report with your answers (2-4 pages, font size 12, spacing 1.5). Your report should can include graphs andtables.