Formulate the above problem as a linear programming problem.

An approach to portfolio optimization is the scenario approach. In this, we identify a few scenarios (less than 10, say) that might occur during the next year. For each scenario we estimate the return on each investment. Then we estimate the expected return and risk of the portfolio. The Sentinel Finance Company, a small firm, wishes to invest in four stocks. The cost of each stock ($ per share) and the forecasts of the return ($ per share) for each stock made by the company’s five analysts are given in the following table: Assume that all forecasts are equally likely. Additionally, the finance company would like to invest no more than $100,000. Sentinel has the following requirements for its investment portfolio: Achieve an expected return of at least 10% of total amount invested. Achieve a minimum risk [as measured by the absolute deviation from the expected return (a surrogate for variance)]. Invest at least 10% of the total investment in stock 4. Formulate the above problem as a linear programming problem.


 

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

PLACE THIS ORDER OR A SIMILAR ORDER WITH BEST NURSING TUTORS TODAY AND GET AN AMAZING DISCOUNT

get-your-custom-paper

The post Formulate the above problem as a linear programming problem. appeared first on BEST NURSING TUTORS .

 
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.