available from a summer job and has identified three potential stocks in which to invest. The cost per share and expected return over the next two years is given in the table. a) Identify the decision variables, objective function, and constraints in simple verbal statements. b) Mathematically formulate a linear optimization model.
Q: A business student has $2,500 available from a summer job and has identified three potential stocks in which to invest. The cost per share and expected return over the next two years is given in the table.
a) Identify the decision variables, objective function, and constraints in simple verbal statements.
b) Mathematically formulate a linear optimization model.
Note: Please state the decision variables, objective function and constraints. The objective function and constraints should be written as a mathematical model using inequality or equality formulas. (This question is interested in maximizing the return)
| Stock | A | B | C |
| Price/share | 12 | 15 | 30 |
| Return/share | $8 | $7 | 11 |
P.S: Please solve in Excel using SOLVER. Also, please explain what is the optimal solution? What is the resulting output of the objective function at the optimal solution?
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