Figure 13.35 shows the Solver sensitivity report for the investment scenario in Problem 4.

Using only the information in the sensitivity report, answer the following questions.

a. How much would the return on stock A have to increase to invest fully in that stock?

b. How much would the return on stock C have to be to invest fully in that stock?

c. Explain the value of the shadow price for the total investment constraint. If the student could borrow $1,000 at 8% a year to increase her total investment, what would you recommend and why?

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D E F G H A B 6 Objective Cell (Max) 7 Cell C Name 8 $A$16 TOTAL RETURN 9 10 Decision Variable Cells Final Value 1166.666667 11 Final 12 Cell Name Value Reduced Cost Objective Allowable Allowable 13 $B$10 Shares Purchased A 0.00 -3.67 Coefficient Increase Decrease 8 3.666666667 14 $C$10 Shares Purchased B 166.67 0.00 7 15 $D$10 Shares Purchased C (3.00) 11 1E+30 1E+30 1.50000005 3 1E+30 16 17 Constraints 18 19 Cell Name Final Value 20 $E$13 Investment Limit Shadow Price 2500 0.466666667 Constraint R.H. Side 2500 Allowable Allowable Increase Decrease 1E+30 2500