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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

  1. 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

  1. Develop the objective function, assuming that the client desires to maximize the total annual return. (2 marks)
  2. 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.
  3. Could either of x or y be negative? Why? What mathematical expression(s) would guarantee that?

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