# Question

Imagine that you have $5,000 to invest and that you will have an opportunity to invest that amount in either of two investments (A or B) at the beginning of each of the next 3 years. Both investments have uncertain returns. For investment A you will either lose your money entirely or (with higher probability) get back $10,000 (a profit of $5,000) at the end of the year. For investment B you will get back either just your $5,000 or (with low probability) $10,000 at the end of the year. The probabilities for these events are as follows:

You are allowed to make only (at most) one investment each year, and you can invest only $5,000 each time. (Any additional money accumulated is left idle.)

(a) Use dynamic programming to find the investment policy that maximizes the expected amount of money you will have after 3 years.

(b) Use dynamic programming to find the investment policy that maximizes the probability that you will have at least $10,000 after 3 years.

You are allowed to make only (at most) one investment each year, and you can invest only $5,000 each time. (Any additional money accumulated is left idle.)

(a) Use dynamic programming to find the investment policy that maximizes the expected amount of money you will have after 3 years.

(b) Use dynamic programming to find the investment policy that maximizes the probability that you will have at least $10,000 after 3 years.

## Answer to relevant Questions

Suppose that the situation for the Hit-and-Miss Manufacturing Co. problem (Example 5) has changed somewhat. After a more careful analysis, you now estimate that each item produced will be acceptable with probability 2/3, ...A county chairwoman of a certain political party is making plans for an upcoming presidential election. She has received the services of six volunteer workers for precinct work, and she wants to assign them to four precincts ...The Toys-R-4-U Company has developed two new toys for possible inclusion in its product line for the upcoming Christmas season. Setting up the production facilities to begin production would cost $50,000 for toy 1 and ...Speedy Delivery provides two-day delivery service of large parcels across the United States. Each morning at each collection center, the parcels that have arrived overnight are loaded onto several trucks for delivery ...Follow the instructions of Prob. 12.5-2 for the following BIP problem: Maximize Z = –5x1 + 25x2, Subject to and x1, x2 are binary.Post your question

0