Figure 13.35 shows the Solver sensitivity report for the investment. Using only the information in the sensitivity report, answer the following questions.

a. How much would the return on stock A have to increase to invest fully in that stock?

b. How much would the return on stock C have to be to invest fully in that stock?

c. Explain the value of the shadow price for the total investment constraint. If the student could borrow $ 1,000 at 8% a year to increase her total investment, what would you recommend and why?

Sensitivity Report for Investment

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6 objective Cell (Max) 7Cell Name Final Value SASIS TOTAL RETURN 116 6667 10 Decision Variable Cells Reduced Objective Allowable Allowable Final Value 12 CellName 13 $BS10 Shares Purchased A 14 SCS10 Shares Purchased B166.67 15 SD$10 Shares Purchased C 16 17 Constraints 18 19 Cell 20 SE$13 Investment Lmit Cost Coefficlent Increase Decrease 0.00 -3,67 0.00 (3.00) B 3.666666667E+30 1E-30 1.50000005 113 IE+30 Final Value Shadow Constraint Allowable Allowable R.H. Side Increase Decrease Name Price 2500 0.466666667 2500 1E+30 2500