CA Corporate has an available funds of $200,000 is considering for new investmentopportunities. The investment portfolio of a variety of stocks has relevant financial data asfollows:StocksABсDPrice per share ($)100508040Annual rate of return0.120.080.060.100.100.07 0.05 0.08Risk measure per dollar invested(Higher values indicate greater risk)The risk measure provided by the firm's top financial advisor, indicates the relativeuncertainty associated with the stock regarding the realization of its projected annual rate ofreturn. Top management of CA Corporate has stipulated the following investment guidelines:1. The annual rate of return for the portfolio must be at least 9%.2. No one stock can count for more than 50% of the total dollar investment.For this overall situation, develop a linear programming model to yield an investmentportfolio which minimizes total risk. What is the total risk and the total return, if the amountto be invested in stocks A, C and D are $333.50, $833.60 and $2500, respectively.

Investment portfolio of stocks is given as follows:

Answered: CA Corporate has an available funds of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Consider the following information for the Alachua Retirement Fund, with a total investment of $4 million. [5] Stock Investment Beta A $ 400,000 1.2 B 600,000 -0.4 C 1,000,000 1.5 D 2,000,000 0.8 The market required rate of return is 12 percent, and the risk-free rate is 6 percent. What is its required rate of return? Stock A has the following probability distribution of expected returns: [5] Probability Rate of Return 0.1 -15% 0.2 0 0.4 5 0.2 10 25 What is Stock A’s coefficient of variation? What is Stock T’s coefficient of…
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