For the investment situation apply the same logic as we did for the Crebo Manufacturing model in

Question:

For the investment situation apply the same logic as we did for the Crebo Manufacturing model in the text to find the optimal solution. Compare your answer with the Solver solution.

A business student has $ 2,500 available from a summer job and has identified three potential stocks in which to invest. The cost per share and expected return over the next 2 years is given in the table.

Stock A B Price/share $25 $15 $30 Return/share $8 $7 $11

a. Identify the decision variables, objective function, and constraints in simple verbal statements.

b. Mathematically formulate a linear optimization model. "

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...