{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 2 problem 51

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

This preview shows pages 1–2. Sign up to view the full content.

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 <=

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 720,000.00 Most possible loss 0.22 0.05 100,000.00 <= 100,000.00 Portfolio limit %65 stocks 1.00 0.00 376,470.59 <= 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...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online