Question

Financial Analysts, Inc., is an investment firm that manages stock portfolios for a number of clients. A new client has requested that the firm handle an $800,000 portfolio. As an initial investment strategy, the client would like to restrict the portfolio to a mix of the following two stocks

Stock	Price/ Share	Estimates Annual Return / Share
Oil Alaska	$50	$6
Southwest Petroleum	$30	$4

         Develop the objective function, assuming that the client desires to maximize the total annual return.

the mathematical expression for each of the following three constraints:

Total investment funds available are $800,000.

Maximum Oil Alaska investment is $500,000.

Maximum Southwest Petroleum investment is $450,000.

Adding the x $ 0 and y $ 0 constraints provides a linear programming model for the investment problem

Answer 1

Thank you.