An investment manager is considering stocks X1, X2, and X3 for investment. Market research shows the following information (per stock)

X1	X2	X3
cost $100 risk measure 8 price annual growth rate: 9% annual return: $14	cost $120 risk measure 10 price annual growth rate: 13% annual return: $15	cost $80 risk measure 7 price annual growth rate: 8% annual return: $20

Based on his experience, the manager has set the following priorities for the investment:

(1) The total amount invested should be at least $90,000. (d1)

(2) The minimum annual average growth rate in stock prices is 12%. (d2)

(3) The risk factor of all stocks should not exceed a total of 5,000. (d3)

(4) The total annual return should be $15,000. (d4)

The constraint for the annual growth rate can be written as:

		9X1 + 13X2 + 8X3 ≥ 12
		[(9X1 + 13X2 + 8 X3)/(X1+ X2+ X3)] + d2- - d2+ ≥ 12
		[(9X1 + 13X2 + 8X3)/(X1+ X2+ X3)] + d2- - d2+ ≤ 0
		-3X1+ X2 - 4X3 + d2- - d2+ ≥ 12
		-3X1 + X2 - 4 X3 + d2- - d2+ = 0

Answer rating: 100% (QA)

from the table we get that Police annual growth 9 growth rate X Price an... View the full answer