Question
Big dawg Investments, Inc. is a new investment firm that deals exclusively with cryptocurrency investments. An investor wants to invest $75,000 in cryptocurrency next year
Big dawg Investments, Inc. is a new investment firm that deals exclusively with cryptocurrency investments. An investor wants to invest $75,000 in cryptocurrency next year and approaches them about investing in Dig deep, Moto, and Hardcore which are currently selling at $175, $1.00, and $26,000 per unit respectively. The expected annual return on each unit of Dig deep is $250, on each unit of Moto is $100, and on each unit and Hard Core if $22,000. Like everyone else, the investor wants to maximize the returns on the investment. The risk index associated with each unit of Dig Deep is 1.6, with each unit of Moto is 1.8, and with each unit of Hard Core is 1.1. Big Dawg recommends not crossing a total risk value of 2500 with their clients investments. Moreover, Hard core is the dominant crypto currency, so the investor insists that a minimum of 1 unit of Hard Core is necessary for the portfolio. Based on these constraints, formulate a Linear Program, and answer the following questions after solving it using Solver in Excel (use two digits after decimal point for your answers).
- The optimal number of purchased Dig Deep is __ , Moto is______, and Hard Core is_____.
- The annual maximized returns on this $75,000 investment are expected to be $__________ .
- Looking at the sensitivity report, the shadow price for Risk Index is__________ .
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