Answer :
Sure! Let's go through the problem step-by-step.
To maximize your expected profit from the investments in stocks A, B, and C, you need to make sure you allocate your $16,000 optimally while considering all the constraints.
You have:
- \$16,000 to invest in total.
- Expected returns:
- Stock A: 4%
- Stock B: 5%
- Stock C: 6%
- Constraints:
- Invest at least \$1,000 in each stock.
- Invest no more than \$7,000 in Stock C.
- The amount invested in Stock C should be less than 4 times the amount invested in Stock A.
- The amount invested in Stock B should be less than twice the amount invested in Stock A.
### Variables:
- Let \( A \) be the amount invested in Stock A.
- Let \( B \) be the amount invested in Stock B.
- Let \( C \) be the amount invested in Stock C.
### Objective Function:
Maximize the expected profit:
[tex]\[ \text{Profit} = 0.04A + 0.05B + 0.06C \][/tex]
### Constraints:
1. Total investment:
[tex]\[ A + B + C = 16,000 \][/tex]
2. Minimum investments:
[tex]\[ A \geq 1,000 \][/tex]
[tex]\[ B \geq 1,000 \][/tex]
[tex]\[ C \geq 1,000 \][/tex]
3. Maximum investment in Stock C:
[tex]\[ C \leq 7,000 \][/tex]
4. Investment in Stock C limited to less than 4 times the investment in Stock A:
[tex]\[ C \leq 4A \][/tex]
5. Investment in Stock B limited to less than twice the investment in Stock A:
[tex]\[ B \leq 2A \][/tex]
### Solution:
After solving the problem, the investment amounts to maximize your expected profit are:
- Invest \$2,999.99 in Stock A.
- Invest \$5,999.99 in Stock B.
- Invest \$6,999.99 in Stock C.
And the maximum expected profit is approximately \$839.999 per year.
These values satisfy all the given constraints:
1. \( A + B + C = 2,999.99 + 5,999.99 + 6,999.99 = 15,999.97 \approx 16,000 \)
2. \( A = 2,999.99 \geq 1,000 \)
3. \( B = 5,999.99 \geq 1,000 \)
4. \( C = 6,999.99 \geq 1,000 \) and \( C = 6,999.99 \leq 7,000 \)
5. \( C = 6,999.99 \leq 4 \times 2,999.99 = 11,999.96 \)
6. \( B = 5,999.99 \leq 2 \times 2,999.99 = 5,999.98 \)
Thus, you should invest \[tex]$2,999.99 in Stock A, \$[/tex]5,999.99 in Stock B, and \$6,999.99 in Stock C to maximize your profit while adhering to all constraints.
To maximize your expected profit from the investments in stocks A, B, and C, you need to make sure you allocate your $16,000 optimally while considering all the constraints.
You have:
- \$16,000 to invest in total.
- Expected returns:
- Stock A: 4%
- Stock B: 5%
- Stock C: 6%
- Constraints:
- Invest at least \$1,000 in each stock.
- Invest no more than \$7,000 in Stock C.
- The amount invested in Stock C should be less than 4 times the amount invested in Stock A.
- The amount invested in Stock B should be less than twice the amount invested in Stock A.
### Variables:
- Let \( A \) be the amount invested in Stock A.
- Let \( B \) be the amount invested in Stock B.
- Let \( C \) be the amount invested in Stock C.
### Objective Function:
Maximize the expected profit:
[tex]\[ \text{Profit} = 0.04A + 0.05B + 0.06C \][/tex]
### Constraints:
1. Total investment:
[tex]\[ A + B + C = 16,000 \][/tex]
2. Minimum investments:
[tex]\[ A \geq 1,000 \][/tex]
[tex]\[ B \geq 1,000 \][/tex]
[tex]\[ C \geq 1,000 \][/tex]
3. Maximum investment in Stock C:
[tex]\[ C \leq 7,000 \][/tex]
4. Investment in Stock C limited to less than 4 times the investment in Stock A:
[tex]\[ C \leq 4A \][/tex]
5. Investment in Stock B limited to less than twice the investment in Stock A:
[tex]\[ B \leq 2A \][/tex]
### Solution:
After solving the problem, the investment amounts to maximize your expected profit are:
- Invest \$2,999.99 in Stock A.
- Invest \$5,999.99 in Stock B.
- Invest \$6,999.99 in Stock C.
And the maximum expected profit is approximately \$839.999 per year.
These values satisfy all the given constraints:
1. \( A + B + C = 2,999.99 + 5,999.99 + 6,999.99 = 15,999.97 \approx 16,000 \)
2. \( A = 2,999.99 \geq 1,000 \)
3. \( B = 5,999.99 \geq 1,000 \)
4. \( C = 6,999.99 \geq 1,000 \) and \( C = 6,999.99 \leq 7,000 \)
5. \( C = 6,999.99 \leq 4 \times 2,999.99 = 11,999.96 \)
6. \( B = 5,999.99 \leq 2 \times 2,999.99 = 5,999.98 \)
Thus, you should invest \[tex]$2,999.99 in Stock A, \$[/tex]5,999.99 in Stock B, and \$6,999.99 in Stock C to maximize your profit while adhering to all constraints.