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The following table shows the rounded average annual rate of return on two TIAA-CREF investment accounts over a 10-year period. An investor wants to invest
The following table shows the rounded average annual rate of return on two TIAA-CREF investment accounts over a 10-year period. An investor wants to invest at least $30,000 in the Bond Market and Social Choice accounts. He assumes that he will be able to get a return equal to the 10-year average, and he wants the total return on his investment to be at least 9 percent. Me assigns each share in the Bond Market account a nsk rating of 2 and each share in the Social Choice account a nsk rating of 5. The approximate share price at the end of June 2004 was $74 per share for the Bond Market account and $102 per share for the Social Choice account. He will use these prices in his analysis. How many shares of each account should he buy in order to minimize his overall risk? Note that fractions of shares may be purchased. (Formulate but DO NOT SOLVE the linear programming Problem)
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