Case Narrative: As a young investor with a moderate risk attitude, you consulted a financial adviser regarding your interest to invest in the equities market. You informed the adviser about the intent to invest a maximum of PHP 650,000 in the stock market however you are unsure which listed companies to invest in. At your request, your financial adviser identified two listed companies where you may reap significant financial returns (i.e., profit) because these companies are likely candidates for a takeover in the near future. One of the companies, DIKOM, is a leading manufacturer of innovative storage battery systems used in the vehicle manufacturing industry, while REIT Corporation is a joint venture firm that operates real estate properties in Quezon City, Metro Manila. DIKOM is currently trading at PHP30 per share while REIT Corporation is currently trading at PHP65 per share. If the takeovers occur at the end of six months, the financial adviser estimates that the price of DIKOM will reach PHP38 per share while RFIT will reach PHP90 per share, Based on

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
icon
Related questions
Question
We are learning about Linear Mathematical Programming in Management Science. Please help with this item.
Case Narrative:
As a young investor with a moderate risk attitude,
you consulted a financial adviser regarding your interest to
invest in the equities market. You informed the adviser about
the intent to invest a maximum of PHP 650,000 in the stock
market however you are unsure which listed companies to
invest in. At your request, your financial adviser identified
two listed companies where you may reap significant
financial returns (i.e., profit) because these companies are
likely candidates for a takeover in the near future. One of the
companies, DIKOM, is a leading manufacturer of innovative
storage battery systems used in the vehicle manufacturing
industry, while REIT Corporation is a joint venture firm that
operates real estate properties in Quezon City, Metro Manila.
DIKOM is currently trading at PHP30 per share while REIT
Corporation is currently trading at PHP65 per share. If the
takeovers occur at the end of six months, the financial
adviser estimates that the price of DIKOM will reach PHP38
per share while REIT will reach PHP90 per share. Based on
the financial adviser's analysis, REIT Corporation was
identified as the higher-risk firm. You have agreed to invest
in the two companies identified by your adviser. Your
financial adviser informed you that a minimum of 10,000
shares is required to invest in DIKOM while a minimum of
3,000 shares is required to invest in REIT. Based on your
financial adviser's analysis, he/she recommended that your
investment in REIT should not exceed PHP 351,000
because of its higher risk.
Task:
Formulate the objective function and constraints.
Define the Z function's variables properly.
Note: The manner by which the objective
constraints, and the graphical solution are generated should
function,
meet the minimum standards.
Transcribed Image Text:Case Narrative: As a young investor with a moderate risk attitude, you consulted a financial adviser regarding your interest to invest in the equities market. You informed the adviser about the intent to invest a maximum of PHP 650,000 in the stock market however you are unsure which listed companies to invest in. At your request, your financial adviser identified two listed companies where you may reap significant financial returns (i.e., profit) because these companies are likely candidates for a takeover in the near future. One of the companies, DIKOM, is a leading manufacturer of innovative storage battery systems used in the vehicle manufacturing industry, while REIT Corporation is a joint venture firm that operates real estate properties in Quezon City, Metro Manila. DIKOM is currently trading at PHP30 per share while REIT Corporation is currently trading at PHP65 per share. If the takeovers occur at the end of six months, the financial adviser estimates that the price of DIKOM will reach PHP38 per share while REIT will reach PHP90 per share. Based on the financial adviser's analysis, REIT Corporation was identified as the higher-risk firm. You have agreed to invest in the two companies identified by your adviser. Your financial adviser informed you that a minimum of 10,000 shares is required to invest in DIKOM while a minimum of 3,000 shares is required to invest in REIT. Based on your financial adviser's analysis, he/she recommended that your investment in REIT should not exceed PHP 351,000 because of its higher risk. Task: Formulate the objective function and constraints. Define the Z function's variables properly. Note: The manner by which the objective constraints, and the graphical solution are generated should function, meet the minimum standards.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Similar questions
Recommended textbooks for you
Algebra and Trigonometry (6th Edition)
Algebra and Trigonometry (6th Edition)
Algebra
ISBN:
9780134463216
Author:
Robert F. Blitzer
Publisher:
PEARSON
Contemporary Abstract Algebra
Contemporary Abstract Algebra
Algebra
ISBN:
9781305657960
Author:
Joseph Gallian
Publisher:
Cengage Learning
Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
Algebra
ISBN:
9781285463247
Author:
David Poole
Publisher:
Cengage Learning
Algebra And Trigonometry (11th Edition)
Algebra And Trigonometry (11th Edition)
Algebra
ISBN:
9780135163078
Author:
Michael Sullivan
Publisher:
PEARSON
Introduction to Linear Algebra, Fifth Edition
Introduction to Linear Algebra, Fifth Edition
Algebra
ISBN:
9780980232776
Author:
Gilbert Strang
Publisher:
Wellesley-Cambridge Press
College Algebra (Collegiate Math)
College Algebra (Collegiate Math)
Algebra
ISBN:
9780077836344
Author:
Julie Miller, Donna Gerken
Publisher:
McGraw-Hill Education