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Could someone please help me out with this Question and briefly explain the solutions Question 2 2. A financial advisor has gathered data on a
Could someone please help me out with this Question and briefly explain the solutions
Question 2 2. A financial advisor has gathered data on a range of energy investment projects for a client who wants to invest 500,000 at minimal risk. Table 1 shows the expected retum and risks for different fossil and renewable projects. The client wants to invest at most 25% of her capital in fossil energy projects, at least twice as much wind as solar energy projects, and at most 200,000 in any one project. Type Fossil Renewables Sub-Type Coal Oil Gas Wind Solar Biomass Expected Return 4.62 4.03 5.15 5.84 4.97 5.98 Expected Risk 3.75 4.75 3.75 6.12 6.78 5.34 Table 1: Energy Investment Options a) Formulate an (I)LP model for the energy investment problem. Your report should explain all components of models. [15 marks) b) The financial advisor wants to explore the energy investment options for less risk adverse clients. Write a short report for the financial advisor to show how your (I)LP model could be amended to maximise returns and the implications of the alternative investment approach. [10 marks) Question 2 2. A financial advisor has gathered data on a range of energy investment projects for a client who wants to invest 500,000 at minimal risk. Table 1 shows the expected retum and risks for different fossil and renewable projects. The client wants to invest at most 25% of her capital in fossil energy projects, at least twice as much wind as solar energy projects, and at most 200,000 in any one project. Type Fossil Renewables Sub-Type Coal Oil Gas Wind Solar Biomass Expected Return 4.62 4.03 5.15 5.84 4.97 5.98 Expected Risk 3.75 4.75 3.75 6.12 6.78 5.34 Table 1: Energy Investment Options a) Formulate an (I)LP model for the energy investment problem. Your report should explain all components of models. [15 marks) b) The financial advisor wants to explore the energy investment options for less risk adverse clients. Write a short report for the financial advisor to show how your (I)LP model could be amended to maximise returns and the implications of the alternative investment approach. [10 marks)Step by Step Solution
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