1. Martha Magnate is a financial consultant working on the portfolio mix of stocks to recommend...
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1. Martha Magnate is a financial consultant working on the portfolio mix of stocks to recommend to a client who recently won $10 million in the Oklahoma lottery. The table below shows the shares he is considering with their expected return and cost per block of shares. In addition to the $10 million limit the following requirements must be met: At least two of stocks A, D, or E must be in the portfolio. Either project B or project C may be done, but not both Exactly one of stocks F or G must be purchased. If stock B is included in portfolio, then stock A must also be included in portfolio. Objective is to maximize annual return on investment. Stock • ● ● ● A B C D E FG Expected annual return ($000) 150 190 210 90 225 120 300 Font Color Cost per share block ($000) 1500 2400 3000 1200 2550 1050 3600 • Write the formulation for this problem as a 0/1 integer programming problem to determine which share blocks should be included in the portfolio. ● Set the problem up in Excel and solve using Solver • Report the solution and objective result 1. Martha Magnate is a financial consultant working on the portfolio mix of stocks to recommend to a client who recently won $10 million in the Oklahoma lottery. The table below shows the shares he is considering with their expected return and cost per block of shares. In addition to the $10 million limit the following requirements must be met: At least two of stocks A, D, or E must be in the portfolio. Either project B or project C may be done, but not both Exactly one of stocks F or G must be purchased. If stock B is included in portfolio, then stock A must also be included in portfolio. Objective is to maximize annual return on investment. Stock • ● ● ● A B C D E FG Expected annual return ($000) 150 190 210 90 225 120 300 Font Color Cost per share block ($000) 1500 2400 3000 1200 2550 1050 3600 • Write the formulation for this problem as a 0/1 integer programming problem to determine which share blocks should be included in the portfolio. ● Set the problem up in Excel and solve using Solver • Report the solution and objective result
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
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