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Fund A sells at $33 a share and has a 3-year average annual return of $3 per share. The risk measure of standard deviation is 17.1. Fund B sells at $46 a share and has a 3-year average annual return of $8 a share. The risk measure of standard deviation is 13.3. Sally Burkhardt wants to spend no more than $7000 investing in these two funds, but she wants to obtain at least $800 in annual revenue. Sally also wants to minimize her risk. Determine how many shares of stock Sally should buy. Sally should buy shares of Fund A and shares of Fund B. (Round to the nearest whole number as needed.)

Fund A sells at $33 a share and has a 3-year average annual return of $3 per share. The risk measure of standard deviation is 17.1. Fund B sells at $46 a share and has a 3-year average annual return of $8 a share. The risk measure of standard deviation is 13.3. Sally Burkhardt wants to spend no more than $7000 investing in these two funds, but she wants to obtain at least $800 in annual revenue. Sally also wants to minimize her risk. Determine how many shares of stock Sally should buy. Sally should buy shares of Fund A and shares of Fund B. (Round to the nearest whole number as needed.)

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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**Investment Decision Problem** **Overview:** - **Fund A:** - Price: $33 per share - 3-year average annual return: $3 per share - Standard deviation (risk measure): 17.1 - **Fund B:** - Price: $46 per share - 3-year average annual return: $8 per share - Standard deviation (risk measure): 13.3 **Objective:** Sally Burkhart aims to invest in Funds A and B with the following goals: 1. Spend no more than $7,000. 2. Obtain at least $800 in annual revenue. 3. Minimize her risk. **Determine:** The number of shares Sally should buy for each fund to meet her objectives. **Solution:** - Sally should buy [___] shares of Fund A and [___] shares of Fund B. - *(Round to the nearest whole number as needed.)*
Transcribed Image Text:**Investment Decision Problem** **Overview:** - **Fund A:** - Price: $33 per share - 3-year average annual return: $3 per share - Standard deviation (risk measure): 17.1 - **Fund B:** - Price: $46 per share - 3-year average annual return: $8 per share - Standard deviation (risk measure): 13.3 **Objective:** Sally Burkhart aims to invest in Funds A and B with the following goals: 1. Spend no more than $7,000. 2. Obtain at least $800 in annual revenue. 3. Minimize her risk. **Determine:** The number of shares Sally should buy for each fund to meet her objectives. **Solution:** - Sally should buy [___] shares of Fund A and [___] shares of Fund B. - *(Round to the nearest whole number as needed.)*
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