(b) What is the expected return and the overall rate of return, if the optimal amount to be invested in securities Hexa and Deca are Rs. 333,000 And Rs. 167,000, respectively.

Intermediate Algebra
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Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
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An investor has a fund of Rs. 500,000 is considering investing in two securities 'Hexa' and
'Deca'. The risk and return associated with these securities is different. Security Hexa gives a
return of 9% and with a risk factor of 5 on the scale of zero to ten. On the other hand, security
Deca gives a return of 15% yet with a risk factor of 8 on the scale of zero to ten. The investor
imposed the following restrictions on how to allocate the funds: The minimum returns on the
investment should be 10 %, and the maximum combined risk should not be more than 6.
(a) Formulate a linear programme to determine an investment plan that will maximize the
the total return.
(b) What is the expected return and the overall rate of return, if the optimal amount to be
invested in securities Hexa and Deca are Rs. 333,000 And Rs. 167,000, respectively.
Transcribed Image Text:An investor has a fund of Rs. 500,000 is considering investing in two securities 'Hexa' and 'Deca'. The risk and return associated with these securities is different. Security Hexa gives a return of 9% and with a risk factor of 5 on the scale of zero to ten. On the other hand, security Deca gives a return of 15% yet with a risk factor of 8 on the scale of zero to ten. The investor imposed the following restrictions on how to allocate the funds: The minimum returns on the investment should be 10 %, and the maximum combined risk should not be more than 6. (a) Formulate a linear programme to determine an investment plan that will maximize the the total return. (b) What is the expected return and the overall rate of return, if the optimal amount to be invested in securities Hexa and Deca are Rs. 333,000 And Rs. 167,000, respectively.
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