An investment company currently has $1 million available for investment in five different stocks. The company wants to maximize the interest earned over the next year. The five investment possibilities along with the expected interest earned are shown below. To manage risk, the investment firm wishes to have at least 35% of the investment in stocks A and B. Furthermore, no more than 15% of the investment may be in stock E Investment Expected Interest Earned C) Stock A Stock B 9 Stock C x Stock D 10 Stock E 11 Formulation Max 0.07A+ 0.098 0.08C 0.10D 0.11E Subject to Constraint 1: A+B+C+D+ES1,000,000. Constraint 2: A+B350,000 Constraint 3: E150,000 A, B, C, D, E 20 Seativity Repeat Ada C 0.02 Reduced Objectiv Mow V Cont Coefficient Ve Ceces 5034 Stock A 002 00 0.00 10-30 3054 Stock D 300000 8.00 6.01 1014 C 402 3.00 000 3-30 1034 Shock D 500000 01 0.01 0.01 150000 0.11 18+30 0.01 Corn Co Col V Pre 1000000 01 1000000 100000 3038 Con 150000 401 300000 500000 150000 100 C) 10000 005 150000 500000 10000 Part A) (10 points) Use the Sensitivity Report to answer the following questions: a. What is the optimal total expected interest eamed for next year? b. What is the dollar amount that should be invested in each stock? c. Which constraints are binding? Which constraints are not binding? d. Is the solution to the problem unique or are there altemate optimal solutions? e. Does the optimal solution call for investing the entire $1,000,000? Part B) (20 points) Use the Sensitivity Report to answer the following questions: What would be the impact on the optimal allocation if the expected interest earned on stock A decreases to 6%? b. What would be the impact on the optimal allocation if the expected interest earned on stock A increases to 10%7 e. What should the minimal expected interest earned for stock C be before it would be desirable to invest in this particular stock? What would be the impact on the optimal allocation and the objective function value if the expected interest earned on stock B decreases by 1% Part C) (20 points) Use the Sensitivity Report to answer the following questions a. Suppose that the amount of money available for investment increases by $50,000. What impact would this have on the current optimal objective function value? b. Suppose that total investment in stocks A and B must be at least 40% of the total amount available for investment (ie, $400,000). What impact would this have on the current optimal objective function value? e. Suppose that the total investment in stocks A and be must be at least 30% of the total amount available for investment. What impact would this have on the current optimal objective function value? d. Assume that no more than 30% of the investment may be in stock. What impact would this have on the current optimal objective function value?