Question
DJS Investment Services must develop an investment portfolio for a new client. As an initial investment strategy, the new client would like to restrict the
DJS Investment Services must develop an investment portfolio for a new client. As an initial investment strategy, the new client would like to restrict the portfolio to a mix of two stocks:
Estimated Annual | ||
Stock | Price/Share | Return (%) |
AGA Products | $ 50 | 6 |
Key Oil | 100 | 10 |
The client wants to invest $40,000 and established the following two investment goals:
Priority Level 1 Goal
Goal 1: Obtain an annual return of at least 9%.
Priority Level 2 Goal
Goal 2: Limit the investment in Key Oil, the riskier investment, to no more than 60% of the total investment.
Formulate a goal programming model for the DJS Investment problem. If you don't need the variable in the model, enter "0". If you need a negative number, enter minus sign with it.
Let | |
x1 = number of shares of AGA Products purchased | |
x2 = number of shares of Key Oil purchased I already finished part of it, what about other blanks? |
Min | ____P1(d1-) | + | __1__P2(d2+) | |||||||
s.t. | ||||||||||
__50__ x1 | + | __100__ x2 | __40000__ | Funds available | ||||||
____ x1 | + | ____ x2 | + | -1d1+ | + | 1d1- | =____ | P1 Goal | ||
____ x1 | + | ____ x2 | + | -1 d2+ | + | 1d2- | =____ | P2 Goal | ||
x1, x2, d1+, d1-, d2+, d2- 0 |
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