Question
Your firm sets up investments on behalf of its clients. A new client has stipulated some parameters for their initial investment. They want the greatest
Your firm sets up investments on behalf of its clients. A new client has stipulated some parameters for their initial investment. They want the greatest return on their investment within their parameters. The maximum investment will be $1,000,000. The clients cousin owns a business called DIP. DIP is a small company, but they are convinced that it will bring a 13 percent return on their investment in the first year. Shares sell at $10 per share. No more than $400,000 will be invested in DIP, "D". They want at least 10 percent of their funds invested into low yield $5,000 bonds "B" with a 3 percent annual return and the rest in $10.00 per share G funds at a 2 percent return. Which is the best objective statement for the problem? Explain why.
a. Maximize $1.30 D + $150 B + $0.20 G
b. None of the answers are correct. If you choose this, comment in the last question (open-end comment question) what it should be.
c. Max 0.13 D + 0.03 B + .020 G
d. Min 0.13 D + 0.03 B + .020 G
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