Part A

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$(10$ points$)$

Use the Sensitivity Report to answer the following questions:

a$.$ What is the optimal total expected interest earned for next

year?

b$.$ What is the dollar amount that should be invested in each stock?

c$.$ Which constraints are binding? Which constraints are not binding?

d$.$ Is the solution to the problem unique or are there alternate optimal solutions?

e$.$ Does the optimal solution call for investing the entire $$1,000,000?$

Part B

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$(20$ points$)$

Use the Sensitivity Report to answer the following questions:

a$.$ What would be the impact on the optimal allocation if the expected interest earned on

stock A decreases to $6\%?$

b$.$ What would be the impact on the optimal allocation if the expected interest earned on

stock A increases to $10\%?$

c$.$ What should the minimal expected interest earned for stock C be before it would be

desirable to invest in this particular stock?

d$.$ What would be the impact on the optimal allocation and the objective function value if

the expected interest earned on stock B decreases by $1\%?$

Part C

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$(20$ points$)$

Use the Sensitivity Report to answer the following questions:

a$.$ Suppose that the amount of money available for investment increases by $$50,000.$

What impact would this have on the current optimal objective function value?

b$.$ Suppose that total investment in stocks A and B must be at least $40\%$ of the total

amount available for investment $($i$.$e$.,$ $$400,000).$ What impact would this have on the

current optimal objective function value?

c$.$ Suppose that the total investment in stocks A and be must be at least $30\%$ of the total

amount available for investment. What impact would this have on the current optimal

objective function value?

d$.$ Assume that no more than $30\%$ of the investment may be in stock E$.$ What impact

would this have on the current optimal objective function value?