Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 two years are given in the table. Complete parts a and b. A Stock B Return/share $12 $9 $16 $7 $25 $13 Price/share a. Identify the decision variables, objective function, and constraints in simple verbal expressions. Identify the decision variables. Select all that apply. A. Price of each stock B. Return for each stock C. Amount invested in stock A D. Amount invested in stock C F Amount invested in stock B Identify the objective function in a simple verbal expression. Choose the correct answer below. A. Maximize return by finding the total sum of the number of shares purchased of each stock and the total sum of the three return/share values, and then multiplying those two sums. B. Maximize return by multiplying the number of shares purchased of each stock by the return/share of that stock and then finding the sum of the three products. OC. Minimize price by finding the total sum of the number of shares purchased of each stock and the total sum of the three price/share values, and then multiplying those two sums. D. Minimize price by multiplying the number of shares purchased of each stock by the price/share of that stock and then finding the sum of the three products. Identify the constraints in simple verbal expressions. Select all that apply. A. The total amount spent on A plus the total amount spent on B plus the total amount spent on C cannot exceed the amount of money the student has available. B. The price/share of A plus the price/share of B plus the price/share of C cannot exceed the amount of money the student has available. C. Minimize the sum of the differences in the price/share and the return/share for each stock. D. The sum of the differences in the price/share and the return/share for each stock cannot exceed the amount of money the student has available. The amount invested in each stock cannot be negative. b. Mathematically formulate a linear optimization model. (Type integers or decimals. Do not round.) Maximize | Return = $9 A+ $7 B+$13 C $12 A+$ 16 B+$25 C$ A, B, C >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started