S. ASSET ALL0CATION A financier plans to invest up to$500,000 in two projects. Project A yields a return of 10%on the investment, whereas Project B yields a returnof 15% on the investment. Because the investment inProject B is riskier than the investment in Project A, thefinancier has decided that the investment in Project Bshould not exceed 40% of the total investment. Howmuch should she invest in each project to maximize thereturn on her investment?

Answered: Image /qna-images/answer/ac8d14c7-babd-49c7-9a05-82f9119c5bbf.jpg

Answered: S. ASSET ALL0CATION A financier plans…

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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1.You are choosing between two texting plans. Plan A has a monthly fee of $15 with a charge of $0.08 per text. Plan B has a monthly fee of $3 with a charge of $0.12 per text. How many text messages in a month make plan A the better deal. 2. You invested $8000 in two funds paying 2% and 5% investment exceeded the interest from the 5% investment exceeded the interest from the 2% investment by $85. How much money was invested at the rate 2%?
Ginny knits two different capes. The ‘Ginny’ model requires 3 hours of knitting and 7 hours to embellish the cape. The ‘Helen’ model requires 5 hours to knit and 5 hours to embellish the cape. Ginny has at most 60 hours a month to knit the capes and at most100 hours a month to embellish the capes. How many capes should she make to maximize her profit if she makes a profit of $80 on each ‘Ginny’ cape and a profit of $100 on each ‘Helen’.
Kevin is an auto mechanic. He spends 2 hours when he replaces the shocks on a car and 2 hours when he replaces the brakes. He works no more than 54 hours a week. He routinely completes at least 2 shocks replacements and 6 brake replacements a week. If he charges $500 for labor replacing shocks and $300 in labor for replacing brakes, how many jobs of each type should he complete a week to maximize his income? Kevin should do enter your response here shock replacements and enter your response here brake replacements every week to maximize his weekly income.
East Coast Athletics is planning to sell its Wilmington, Philadelphia, and Boston gyms. The firm expects to sell its Wilmington gyrn for a cash flow of $A, Its Philadelphia gym for a cash flow of $A, and its Boston gym for a cash flow of $B. The firm expects to sell its Wilmington gym in T years, its Philadelphia gym in 5 years, and its Boston gym in S years. The cost of capital for all three gyms is Y. A > B>0, S > T > 0, and Y> 0. The cash flows from the sales are the only cash flows associated with the various gyms. Based on the information in the preceding paragraph, which one of the following assertions is true? O None of the above assertions is true O The Wilmington gym is the most valuable of the 3 gyms O The Boston gym is the most valuable of the 3 gyms O Two of the three gyms have equal value and those two gyms are more valuable than the third gyms or all three gyms have the same value O The Philadelphia gym is the most valuable of the 3 gyms
A financial manager has to invest $ 200000 in two options, one risky with a return of 20% and second less risky with a return of 10% per year. If the goal is to make $ 32000 at the end of the year what should be distribution of the money in both options.
Elaine Benes is considering three possible ways to invest the $200,000 she has just inherited. Some of Elaine’s friends are considering financing a combined laundromat, video-game arcade, and pizzeria, where the young singles in the area can meet and play while doing their laundry. This venture is highly risky and could result in either a major loss or a substantial gain within a year. Elaine estimates that the chances of losing all the money (i.e. loss of $200,000) are 47%, while the chances of making a $200,000 profit are 53%. Elaine can invest in some new apartments that are being built in town. Within 1 year, this fairly conservative project will produce a profit of at least $10,000, but it might yield $20,000 or even $30,000. Elaine estimates the probabilities of these yields at 20%, 50%, and 30% respectively. Elaine can invest in some private securities that have a current yield of 5%. Construct (draw) a decision tree for Elaine to determine which investment will maximize her…
3. Investments Nui invests $10,000, received from her grandmother, in three ways. With one part, she buys mutual funds that offer a return of 6.5% per year. She uses the second part, which amounts to twice the first, to buy government bonds at 6% per year. She puts the rest in the bank at 5% annual interest. The first year her investments bring a return of $605. How much did she invest in each way?
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An investor wants to exactly replicate the put option's payoff so he considers to buy X shares of the stock and Y shares of bonds. Suppose the stock price is $70 and the bond price with coupon rate 5% is $100. The stock price will either go up 15% or down 8% in one year. There are one European call option and one European put option with exercise price of $70 that will be expired in one year. Short selling is allowed. What are the values of X and Y?

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