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An investor considers investing $500,000 today in two stocks: stock A stock B For the two stocks, random daily returns tomorrow are described by 5
An investor considers investing $500,000 today in two stocks: stock A stock B For the two stocks, random daily returns "tomorrow" are described by 5 probable scenarios, each one of them with a certain probability to occur. Scenario Return on Stock A Return on Stock B Probability 1 -0.0024 0.0580 10% 2 0.0178 -0.0440 15% N 3 0.0220 0.0330 20% 4 -0.0118 0.0022 25% 5 -0.0152 0.0022 30% Find the optimal combination of how much to invest in each one of the two stocks to get the maximum profit, and its amount, considering that you can only accept a risk (defined by the Standard Deviation) of 7,000 And show how you arrived to the solution An investor considers investing $500,000 today in two stocks: stock A stock B For the two stocks, random daily returns "tomorrow" are described by 5 probable scenarios, each one of them with a certain probability to occur. Scenario Return on Stock A Return on Stock B Probability 1 -0.0024 0.0580 10% 2 0.0178 -0.0440 15% N 3 0.0220 0.0330 20% 4 -0.0118 0.0022 25% 5 -0.0152 0.0022 30% Find the optimal combination of how much to invest in each one of the two stocks to get the maximum profit, and its amount, considering that you can only accept a risk (defined by the Standard Deviation) of 7,000 And show how you arrived to the solution
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