3. An investor wants to invest $55,000 in two mutual funds, A and B. The rates of returm, risks and minimum investmentrequirements for each fund are:FundRate of return12%Minimum investment$20,000Risk0.450.3Note that a low Risk rating means a less risky investment. The investor can invest to maximize the expected rate of returnor minimize risk. Any money beyond the minimum investment requirements can be invested in either fund.9%$10,000Formulate the MOLP for this investor and solve for it.

Let us say that Fund A as "x1" and Fund B as "x2" for formulation purpose As given in the question,…

Answered: 3. An investor wants to invest $55,000…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Marco has become charitably inclined since suffering serious health issues. He wants to establish a charitable trust that will provide him with an annual income for life with the remainder to charity. He also wants to be able to make additional contributions to the trust on an ongoing basis. Which of the following charitable trusts will meet his needs? Charitable lead trust (CLT) Charitable remainder annuity trust (CRAT) Charitable remainder unitrust (CRUT) A)II and III B)I only C)III only D)I and II
(c) Suppose that a second client with $55,000 to invest has been classified as an aggressive investor. B&R recommends that the maximum portfolio risk rating for an aggressive investor is 310. What is the recommended investment portfolio for this aggressive investor? Internet Fund = $ 55000 Blue Chip Fund = $ Annual Return = $ 6600 (d) Suppose that a third client with $55,000 to invest has been classified as a conservative investor. B&R recommends that the maximum portfolio risk rating for a conservative investor is 150. Develop the recommended investment portfolio for the conservative investor. If an amount is zero, enter "0". Internet Fund = $ Blue Chip Fund = $ 55000 Annual Return = $ 4950
Conoly Co. has identified an investment projectwith the following cash flows. If the discount rate is 10 percent, what is the present valueof these cash flows? What is the present value at 18 percent? At 24 percent?Year Cash Flow1 $ 9602 8403 9354 1,350
The cash flow details of a public project is as follows Initial cost =BD 210000 Annual operating cost = BD 10000 Worth of annual benefits = BD 12,000 Worth of annual disbenefits = BD 1245 Salvage value = BD 150000 Interest rate per year = 8% and useful lie = 30 Years Using benefit-cost ratio method and find out the economical acceptability of the public project. Use PW and AW methods to find out the equivalent worth of costs, benefits and disbenefits, also discuss why it is profitable(Use excel)
F1. Subject :- finance a business worth $125,000 is expected to grow at 3% per year compounded annually for the next 2 years. Find the expected future value.
Webber Limited plans to maintain cash balance of $8000. The variance of its daily cash flow to date is $4,000,000. The cost to buy or sell the firm’s security is approximately $50. The daily interest is 0.025%. Calculate: The lower limit The spread The upper limit The return point
Consider the Following data below. FAMILY MONTHLY INCOME LIFE INSURANE A 10 20 B 12 30 C 15 50 D 23 100 E 35 200 F 12 40 G 13 80 H 28 150 I 45 300 J 18 70 If monthly income is $20, what would be the amount of Life insurance coverage? O a. $90.687 O b $85.672 O $95.432 O $95.732
The interest rate for the first five years of a $34,000 mortgage loan was 3.95% compounded semiannually. The monthly payments computed for a 10-year amortization were rounded to the next higher $10. (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. Calculate the principal balance at the end of the first term. Principal balance $ b. Upon renewal at 6.45% compounded semiannually, monthly payments were calculated for a five-year amortization and again rounded up to the next $10. What will be the amount of the last payment? Final payment $
9.3 Consider another set of net cash flows: Year Cash Flow ($) 0 2,000 1 2,000 2 0 3 1,500 4 2,500 5 4,000 What is the net present value of the stream if the opportunity cost of capital is 10 percent? What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually? What cash flow today (time 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)
River Road Medical Clinic is thinking of investing in a sophisticated new piece of medical equipment. It will generate $7,000 per year in receipts for 5 years. Determine the present value of this cash flow; assume an interest rate of 6%.
If the contract annual interest rate on a $2,880,000 fixed rate loan that is fully amortizing over 20 years with equal monthly payments is 6.25%, what is the effective yield to the lender if the lender charges 1.5% as an origination fee, $288 for a credit report and $3,080 for an appraisal fee and the loan is repaid after ten years? a. 6.25% b. 6.51% c. 6.46% d. 6.49%
8. Nabil is considering buying a house while heis at university. The house costs $200 000 today. Renting out part ofthe house and living in the rest over his fiveyears at scho ol will net, after expenses, $2000 permonth. He estimates that he will sell the house after five years for $210 000. If Nabil's MARRis ó percent compounded monthly, should he buy the house? Use present worth.

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