(Investment decision problem) The Heinlein and Krampf Brokerage firm has just been instructed by prepare a list of high-quality stocks and bonds and heir corresponding rates of retarn: one of its clients to invest $250,000 of her money obtained recently through the sale of land holdings in Ohio. The client has a good deai of trust in the in- vestment house, hut she also has her own ideas about the distribution of the funds being invested. In par- ticular, sbe reguests that the firm select whatever stocks and bonds they believe are well ruted, but within the following guidelines (a) Municipal bonds should constitute at least 20% PROJECTED RATE INVESTMENT Los Angcles municipal bosds Thompson Electronics, Inc Uaised Aerospace Corp. Palmer Drugs Happy Days Nursing Homes OF RETURN 5.3 6.8 4.9 84 11.8 of the investment (b) At least 40% of the funds should be placed in a (a) Formulate this portfolio selection problem using LP b) Solve this problem combination of electronic firms, acrospace firms, and drug manufacturens (c) No more than 50% of the amount invested in municipal bonds shoald be placed in a high-risk high-yield nursing home stock Subjectthese restraints, the client's Foal is max- mize projecied returs on investmests. The analysts at Heinlein and Krampf. aware of these guidelines In 2009, the New York Yankces won 1403 haseball games duing the regulue scasos The table on tht next page lists the number of victories (W), the carned- run-average (ERA), and the batting average (AVG) of each team in the American Leagan. The ERA is one measure of the effectiveness of the piaching staff batting average is one measure of effectiveness of the hiaters, and a (o) Which of the two models is bener for presdficting lhe number of victories dales both ERA and botti aveug. How does this compare io the previous mdels andlower Dumber is better The higher numlber is bene (a) Devclop a negression model that could be used tu prodiet te minilier of victories hasodee ERA. Cb) Develop a regnession model the could be used to ing averape MONTHCA STOCK STOCK 2 ew York Vankees 12.4 (Investment decision problem) The Heinlein and Krampf Brokerage firm has just been instructed by prepare a list of high-quality stocks and bonds and heir corresponding rates of retarn: one of its clients to invest $250,000 of her money obtained recently through the sale of land holdings in Ohio. The client has a good deai of trust in the in- vestment house, hut she also has her own ideas about the distribution of the funds being invested. In par- ticular, sbe reguests that the firm select whatever stocks and bonds they believe are well ruted, but within the following guidelines (a) Municipal bonds should constitute at least 20% PROJECTED RATE INVESTMENT Los Angcles municipal bosds Thompson Electronics, Inc Uaised Aerospace Corp. Palmer Drugs Happy Days Nursing Homes OF RETURN 5.3 6.8 4.9 84 11.8 of the investment (b) At least 40% of the funds should be placed in a (a) Formulate this portfolio selection problem using LP b) Solve this problem combination of electronic firms, acrospace firms, and drug manufacturens (c) No more than 50% of the amount invested in municipal bonds shoald be placed in a high-risk high-yield nursing home stock Subjectthese restraints, the client's Foal is max- mize projecied returs on investmests. The analysts at Heinlein and Krampf. aware of these guidelines In 2009, the New York Yankces won 1403 haseball games duing the regulue scasos The table on tht next page lists the number of victories (W), the carned- run-average (ERA), and the batting average (AVG) of each team in the American Leagan. The ERA is one measure of the effectiveness of the piaching staff batting average is one measure of effectiveness of the hiaters, and a (o) Which of the two models is bener for presdficting lhe number of victories dales both ERA and botti aveug. How does this compare io the previous mdels andlower Dumber is better The higher numlber is bene (a) Devclop a negression model that could be used tu prodiet te minilier of victories hasodee ERA. Cb) Develop a regnession model the could be used to ing averape MONTHCA STOCK STOCK 2 ew York Vankees 12.4