Question
Q2. DJS Investment Services must develop an investment portfolio for a new client. As an initial investment strategy, the new client would like to restrict
Q2. DJS Investment Services must develop an investment portfolio for a new client. As an initial investment strategy, the new client would like to restrict the portfolio to a mix of two stocks (15 marks) Stock Price/Share Estimated Annual Return (%) AGA Products $ 50 6 Key Oil 100 10 The client wants to invest $50,000 and establish the following two investment goals: Priority Level 1 Goal Goal 1: Obtain an annual return of at least 9%. Priority Level 2 Goal Goal 2: Limit the investment in Key Oil, the riskier investment, to no more than 60% of the total investment. a. Formulate a goal programming model for the DJS Investment problem. [1,1,5] b. Use the graphical goal programming procedure to obtain a solution. [2,2,4] c. Given the priorities, why do you think that the solution arrived at is the best solution. [3,5,3] d. Provide a comprehensive interpretation of the solution. [3,5,3]
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