For i = A, B, C, D, E, F, G, we define the decision variables.
Let i={(1 if investment i is chosen ),(0 otherwise ):}
Write the objective function and the constraint in equations.
Maximize expected return =
Expected return is equal to the sum of the products of the returns and the decision variables.
Subject to:
Total investment constraint:
Constraint for condition 1: If investment F
is chosen, then investment G must also be
part of the portfolio:
Constraint for condition 2: At least four
investments should be chosen:
Constraint for condition 3: Of investments A
and B, exactly one must be included:
Constraint for decision variables:
A,B,C,D,E,F,G
Investment A B c D E F G
Cost $10,000 $12,000 $3,500 $5,000 $8,500 $8,000 $4,000
Expected Return $800 $900 $400 $450 $800 $600 $250
Singh has a total of $50,000 to invest. The following conditions must be met: (1 if investment F is chosen, then investment G must also be part of the portfolio, (2 at least four investments should be chosen, and (3) of investments A and B, exactly one must be included. Formulate and solve this problem using LP software to determine which stocks should be included in Singh's portfolio
For i = A, B, C, D, E, F, G, we define the decision variables.
1 if investment i is chosen Leti= 0 otherwise
Write the objective function and the constraint in equations.
Maximize expected return =
Expected return is equal to the sum of the products of the returns and the decision variables.
Subject to:
Total investment constraint: Constraint for condition 1: If investment F is chosen, then investment G must also be part of the portfolio: Constraint for condition 2:At least four investments should be chosen: Constraint for condition 3: Of investments A and B, exactly one must be included: Constraint for decision variables:
V
V
A, B, C, D, E, F, G
