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Financial Analysts, Inc., is an investment firm that manages stock portfolios for a number of clients. A new client has requested that the firm handle
- Financial Analysts, Inc., is an investment firm that manages stock portfolios for a number of clients. A new client has requested that the firm handle an $800,000 portfolio. As an initial investment strategy, the client would like to restrict the portfolio to a mix of the following two stocks:
Let x = number of shares of Oil Alaska
y = number of shares of Southwest Petroleum
Stock | Price per share | Estimated Annual return per Share |
Oil Alaska | $65 | $8.5 |
Southwest Petroleum | $45 | $4.0 |
- Develop the objective function, assuming that the client desires to maximize the total annual return. (2 marks)
- Show the mathematical expression for each of the following three constraints: 1.Total investment funds available are $750,000. 2.Maximum Oil Alaska investment is $600,000. 3.Maximum Southwest Petroleum investment is $550,000. c.
- Could either of x or y be negative? Why? What mathematical expression(s) would guarantee that?
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