An investment strategy restricts the portfolio to a mix of two stocks A and B with the following price/share and annual returns:
Assume that the maximum amount available for investment is $100,000 with the following 2 prioritized investment goals:
Rank R1: Obtain an annual return of at least 6%.
Rank R2: Limit the investment in stock B to no more than 55% of the total investment.
Assume X? = dollar amount allocated to stock A,and X? = dollar amount allocated to stock B.
What is the objective function?
A) Min d?? + d??
B) Min R?(d??) + R?(d??)
C) Min R?(d??) - R?(d??)
D) Min R?(d??) + R?(d??)
E) Min R?(d??) + R?(d??)
Correct Answer:
Verified
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