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7.20 A wincer of the Texas Lotto has decided to invest $90,000 per year in the stock market. Under consideration are stocks for a petrochernical

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7.20 A wincer of the Texas Lotto has decided to invest $90,000 per year in the stock market. Under consideration are stocks for a petrochernical firm and a public utility. Although a long-range goal is to get the highest posstble return, some consideration is given to the risk ifivolved with the stocks. A risk index on a seale of 1-10 (with 10 being the most risky) is assigned to each of the two stociks. The total risk of the portfolio is found by multiplying the risk of each stock by the dollars invested in that stock, The following table provides a summary of the tetum and risk: The investor would like to maximize the return on the investment, but the average risk index of the investment should not be higher than 6 . How mach stodid be invested is each stock? What is the averageturn for this investment? P= Petrochemical U= Utility Linear Program: Max Return = Subject to: (total inostment) (risk) Points for Lines Linal

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