Chrome File e Edit View History Bookmarks Profiles Tab Window Help 1 6 0 X 1 7 Q 8 . Tue Feb 28 9:13:41 AM . . . (23) He Made $150 in 30 M 4:1 ini National University | Apps X D2L 407 Week 1: Homework - MNS X 407 Week 1: Homework - MNS + C webassign.net/web/Student/Assignment-Responses/last?dep=31435685 ABP K. @ *= 0 8. [-/1 Points] DETAILS ASWMSCI15 3.E.007. MY NOTES PRACTICE ANOTHER ges stock portfolios for a number of clients. A particular portfolio consists of U shares of U.S. Oil and H shares of Huber Steel. The 700. In addition, the portfolio is limited to a maximum of 1,000 shares of U.S. Oil. The linear programming formulation that will maximize the total annual return of the portfolio is as follows. ber Steel. The annual return for U.S. oil . The portfolio has $80,000 to be invested. The portfolio risk index (0.50 per share of U.S. Oil and 0.25 per share for Huber Steel) has a maximum of Max 30 + 5H .t. Maximize total annual return 250 + 50H s 80,000 Funds available .50U + 0.25# 100 U.S. Oil maximum U . H ZO The computer output is shown below. Optimal Objective Value = 8400.00000 Variable Value Reduced Cost 0.00000 1200 00000 0.00000 Constraint Slack/Surplus Dual Value 0-00600 0.09353 200 . 00000 D.00000 ariable Coefficient increase Decrease 2 80900 1.00000 2- 30606 onstraint RHS Allowable Increase Decrease 0900. 00000 60000 - 60800 15000 .00000 1000 .00000 Infinite 200 . 00000 (a) What is the optimal solution, and what is the value of the total annual return (in $)? estimated annual return (b) Which constraints are binding? What is your interpretation of these constraints in terms of the problem? (Select all that apply.) Constraint 1. All funds available are being utilized. [ Constraint 2. The maximum permissible risk is being incurred. straint 3. All available shares of U.S. Oil are being purchased. None of the constraints are binding. (c) What are the dual values for the co imal places.) constraint 1 O Constraint 1 has a dual value of 3. If an additional dollar is added to the available funds, the total annual return is predicted to increase by $3. Constraint 1 has a dual value of 5. If an additional Is, the total annual return is predicted to increase by $5. Constraint 1 has a slack of $200. Additional dollars added to the available funds will not improve the total annual return. Constraint 1 has a dual value of 1.33. If an additional dollar is added to the available funds, the total annual return is predicted to increase by O Constraint 1 has a dual value of 0.09. If an additional total annual return is predicted to increase by $0.09. Constraint 2 has a dual value of 3. If the risk predicted to increase by $3. Constraint 2 has a dual value of 5. If the risk index is increased by 1, the total annual return is predicted to increase by $5. Constraint 2 has a slack of 200. Allowing additional risk will not improve the total annual return. Constraint 2 has a dual value of 1.33. If the risk index is increas dicted to increase by $1.33 O Constraint 2 has a dual value of 0.09. If the risk index is increased by 1, the total ar edicted to increase by $0.09. O Constraint 3 has a dual value of 3. If the ma 1, the total annual return is predicted to increase by $3. O Constraint 3 has a dual value of 5. If the maximum number of shares of U.S. Oil is increased by 1, the total annual return is predicted to increase by $5. O Constraint 3 has a slack of 200 shares. Raising the maximum number of shares of U.S. Oil will not improve the total annual return. O Constraint 3 has a dual value of 1.33. If the maximum number of shares of U.S. Oil is increased by 1, the total annual return is predicted to increase by $1.33. O Constraint 3 has a dual value of 0.09. If the maximum num qual return is predicted to increase by $0.09. (d) Would it be beneficial to increase the maximum amount invest amount invested in U.S. Oil? Why or why not? Yes, each additional share increases the profit by $1.33. Yes, each additional share increases the profit by $0.09 Yes, each additional share increases the profit by $200.00. shares does not affect the optimal value. Need Help? Read It Show My Work (Optional)@ O 28 I 4 Aa OF