system modeling (information systems) help
teron501.------- elements of the Linear Optimization. Please define and discuss the important elements and why are they important? Additionally, discuss the tools involved in Linear Optimization. Since this is a graded assignment please provide reference citations for information.
2.------- MANAGING A PORTFOLIO------ A local bank wants to build a bond portfolio from a set of four bonds with $1 million available for investment. The expected annual return, the worst-case annual return on each bond, and the "duration" of each bondare given in the following table.(The duration of a bond is a measure of the bond's sensitivity to changes in the interest rates.)
TABLE
Expected worst case
Return Return Duration
Bond 1 12.5% 8.0% 8
Bond 2 11.5% 7.5% 7
Bond 3 10.5% 6.8% 6
Bond 4 9.5% 7.0% 5
Bond 5 8.5% 7.4% 3
The bank wants to maximize the expected return from its bond investments, subject to three conditions.
1.---- The average worst-case return for the portfolio must be at least 7.2 percent.
2.--- The avereage duration of the portfolio must be at most 6.
3.---- Because of diversification requirements, at most 40 percent of the total amount invested can be invested in a single Bond.
Questions:
A.---- What is the maximum return on the $ 1 million investment? How should the investment be distributed among the bonds to achieve this return?(Assume that bonds can be purchased in fractional amounts.)
B.----- What is the qualitative pattern in the optimal solution?
C.---What is the marginal rate of return on the investment amount? That is, what would be the percentage return on an additinal dollar invested?(Give the percentage to four significant figures.)
- 11 years ago
- 15
Purchase the answer to view it
- lp.docx
- lp.xlsx
- Write a Technical Description
- Testing 1-2
- Financial statement analysis, Managerial Accounting concepts and principles, job order costing
- Ethnographic Writing Assignment Help
- FIN534 Quiz 4
- Statistics: MCQs and True/False
- stat 3Q's
- What are some of the important experiences that impacted the development of your self concept
- 2x+4y=12 -6x+5y=2 solve using elimination
- Business Law