Question
At the beginning of year 1, you have $100,000. Investments A and B are available; their cash flows are shown in the file P04_62.xlsx .
At the beginning of year 1, you have $100,000. Investments A and B are available; their cash flows are shown in the file P04_62.xlsx. Assume that any money not invested in A or B earns interest at an annual rate of 2.5%.
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Determine how to maximize your cash on hand in year 4.
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Use SolverTable to determine how a change in the year 3 yield for investment A changes the optimal solution to the problem.
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Use SolverTable to determine how a change in the year 4 yield of investment B changes the optimal solution to the problem.
| Investment data | ||
| Year | A | B |
| 1 | -$1.00 | $0.00 |
| 2 | $0.50 | -$1.00 |
| 3 | $0.80 | $0.80 |
| 4 | $0.20 | $0.70 |
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Fintech For Finance Professionals
Authors: David Kuo Chuen Lee, Joseph Lim, Kok Fai Phoon, Yu Wang
1st Edition
9811241864, 978-9811241864
