1) Mr. Perez wants to invest up to $20,000 in two stocks, Cal Computers and Texas Tools. The Cal computers stock is expected to yield a 16% annual return, while the Texas Tools stock promises a 12% yield. Mr. Perez would like to earn at least $2,800 this year. According to Value Line Magazine's safety index (1 highest to 5 lowest), Cal Computers has a safety number 3 and Texas Tools has a safety number of 2. How much money should he invest in each to minimize the safety number? A lower safety number means less risk. Please explain answer
1) Mr. Perez wants to invest up to $20,000 in two stocks, Cal Computers and Texas Tools. The Cal computers stock is expected to yield a 16% annual return, while the Texas Tools stock promises a 12% yield. Mr. Perez would like to earn at least $2,800 this year. According to Value Line Magazine's safety index (1 highest to 5 lowest), Cal Computers has a safety number 3 and Texas Tools has a safety number of 2. How much money should he invest in each to minimize the safety number? A lower safety number means less risk. Please explain answer
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section9.3: Single-stage Decision Problems
Problem 5P
Related questions
Question
D4.
![1) Mr. Perez wants to invest up to $20,000 in two stocks, Cal Computers and Texas
Tools. The Cal computers stock is expected to yield a 16% annual return, while
the Texas Tools stock promises a 12% yield. Mr. Perez would like to earn at least
$2,800 this year. According to Value Line Magazine's safety index (1 highest to 5
lowest), Cal Computers has a safety number 3 and Texas Tools has a safety
number of 2. How much money should he invest in each to minimize the safety
number? A lower safety number means less risk.
Please explain
answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff45f1cd3-5ba1-46ed-898f-d6d425cb9227%2Fb86e1eca-5d86-4b70-874c-e551e3b60e66%2F81sjj47_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1) Mr. Perez wants to invest up to $20,000 in two stocks, Cal Computers and Texas
Tools. The Cal computers stock is expected to yield a 16% annual return, while
the Texas Tools stock promises a 12% yield. Mr. Perez would like to earn at least
$2,800 this year. According to Value Line Magazine's safety index (1 highest to 5
lowest), Cal Computers has a safety number 3 and Texas Tools has a safety
number of 2. How much money should he invest in each to minimize the safety
number? A lower safety number means less risk.
Please explain
answer
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