Problem 2: Applications of Linear Programming: Visa Inc. Stock sells for $92 a share and has 3-yearaverage annual return of $20 a share. The beta value is 1.06. JP Morgan Chase and Co. sells for $87 ashare and has a 3-year average annual return of $17 a share. The beta value is 1.21. Derek wants tospend no more than $15,000 investing in these two stocks, but he wants to earn at least $2500 in annualrevenue. Derek also wants to minimize the risk. Determine the number of shares of each stock thatDerek should buy.

For determine the number of shares of each stock, Derek should buy to meet his investment goals…

Answered: revenue. Derek also wants to minimize…

Business

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revenue. Derek also wants to minimize the risk. Determine the number of shares of each stock that Derek should buy.

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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Question

Problem 2: Applications of Linear Programming: Visa Inc. Stock sells for $92 a share and has 3-year
average annual return of $20 a share. The beta value is 1.06. JP Morgan Chase and Co. sells for $87 a
share and has a 3-year average annual return of $17 a share. The beta value is 1.21. Derek wants to
spend no more than $15,000 investing in these two stocks, but he wants to earn at least $2500 in annual
revenue. Derek also wants to minimize the risk. Determine the number of shares of each stock that
Derek should buy.

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