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Problem 4. Firm specializes in recommending oil stock portfolios. At least two Texas oil firms must be in portfolio. . No more than one investment
Problem 4. Firm specializes in recommending oil stock portfolios. At least two Texas oil firms must be in portfolio. . No more than one investment can be made in foreign oil. . Exactly one of two California oil stocks must be purchased. . If British Petroleum stock is included in portfolio, then Texas-Trans Oil stock must also be included in portfolio. . Client has $3 million available for investments and insists on purchasing large blocks of shares of each company for investment. . Objective is to maximize annual return on investment.Cost for block Company Name Expected Annual of shares Return($1000's) ($1000's) Trans-Texas Oil 50 480 British Petroleum 80 540 Dutch Shell 90 680 Houston Drilling 120 1000 Lonestar Petroleum (Texas) 110 700 San Diego Oil 40 510 California Petro 75 900
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