Question
Erica won a cash prize of $1000 in a holiday raffle. She wants to invest her money in stock market, crypto currency, NFT, or government
- Erica won a cash prize of $1000 in a holiday raffle. She wants to invest her money in stock market, crypto currency, NFT, or government bonds. Each dollar invested in stock market, crypto currency, NFT, government bonds yield 7, 12, 20, 9 cents, respectively. Erica has decided to use following rules to reduce the risk of her investments:
The amount invested in crypto currency and NFT (total) cannot exceed the amount invested in stock market and government bonds (total).
The amount invested in crypto currency or NFT (individually) should not exceed 25% of the total invested amount.
No more than 40% should be invested in the stock market.
- What are the variables and what is the objective function for this problem?
| Type | Amount |
| Stock Market | A1 |
| Crypto | A2 |
| NFT | A3 |
| Bonds | A4 |
- What are the constraints?
A1 + A2 + A3 + A4
A2 +A3 A1 + A4
A2 30% * 1000 A2 300
A3 300
A1 40% * 1000 = A1 400
- Solve the problem using Excel Solver or LP Solve. How much should be invested in each investment option?
- What is the return on investment?
- If the amount available is $2500, would the answers in (c) change? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Interest Rate Swaps And Their Derivatives A Practitioners Guide
Authors: Amir Sadr
1st Edition
0470443944, 978-0470443941
