Chapter 2 problem 51

Chapter 2 problem 51 - 720,000.00 Most possible loss 0.22...

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Part A: Setup Let S= Represent Stock investment Let B= Represent Bond Investment S B Solution 1.00 1.00 OF: Max Loss 0.18 0.06 0.24 constraints: Investment 1.00 1.00 2.00 <= 720,000.00 Most possible loss 0.22 0.05 0.27 <= 100,000.00 Portfolio limit %65 stocks 1.00 0.00 1.00 <= 468,000.00 Part A: Setup Let S= Represent Stock investment Let B= Represent Bond Investment S B Solution 376,470.59 343,529.41 OF: Max Loss 0.18 0.06 88,376.47 constraints: Investment 1.00 1.00 720,000.00 <=
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Unformatted text preview: 720,000.00 Most possible loss 0.22 0.05 100,000.00 &lt;= 100,000.00 Portfolio limit %65 stocks 1.00 0.00 376,470.59 &lt;= 468,000.00 Constraint 1 She has $720,000 to invest amongst stocks and bonds Constraint 2 most she could lose in stock 22% most she could lose in bond fund 5% Limiting potential losses to $100,000 Constraint 3 Does not want to invest more than 65% in stocks .65*720000=468000...
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Chapter 2 problem 51 - 720,000.00 Most possible loss 0.22...

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