An investor has $80,000 to invest in three stocks, stock A costs $100, stock B costs $120 and stock C costs $80. Each stock A has a risk factor of 8, each stock B has a risk factor of 10 and each stock C has a risk factor of 7. The investor believes that the sum of the risk factors for all stocks purchase should not exceed 6000. The projected annual growth rate for the three stocks are 9%, 13% and 8% respectively. The projected annual dividend income from these stocks are as follows: Stock A: $14/stock, Stock B: $15/stock, and Stock C: $20/stock. The investor desires an annual dividend income of $10,000. The investor has established the following goals in order of their importance:
(1) The investor believes that the budget cannot be exceeded. (d1)
(2) The risk factor should not exceed the target amount of 6000. (d2)
(3) The average annual growth rate in stock prices must be at least 10%. (d3)
(4) The investor desires a dividend income of at least $10,000. (d4)
-Write the risk factor constraint
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q37: Scoring models use consistency indexes to measure
Q38: Deviational variables that occur in the objective
Q39: In scoring models, the two alternatives with
Q40: The objective function formulation for a goal
Q41: Ashley's manufactures home furnishings for department
Q43: Using the normalized matrix given below,
Q44: Assume that a decision maker using
Q45: Assume that a plant manager has
Q46: A production of 300 units of Twiddle
Q47: Assume that a plant manager has
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents