# Refer to Problem 10 and the sensitivity report shown in Figure 8.17. a. Suppose the risk index

## Question:

Refer to Problem 10 and the sensitivity report shown in Figure 8.17.

a. Suppose the risk index for the stock fund (the objective function coefficient for S) increases from its current value of 8 to 12. How does the optimal solution change, if at all?

b. Suppose the risk index for the money market fund (the objective function coefficient for M) increases from its current value of 3 to 3.5. How does the optimal solution change, if at all?

c. Suppose the objective function coefficient for S increases to 12 and the objective function coefficient for M increases to 3.5. Can you determine how the optimal solution will change using the information in Figure 8.17?

## Step by Step Answer:

**Related Book For**

## Quantitative Methods for Business

**ISBN:** 978-0840062345

12th edition

**Authors:** David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam