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July 19, 2011 @ 12:56 PM
D

Post: 704

Join Date: May 2011

Location: Bucket West

A portfolio manager for a mutual fund company is strategizing for the next calendar year. After careful analysis, she has identified the following stocks as candidates for inclusion in her portfolio this year.
Risk Estimated
Investment Category: Stock Price/Share Classification Dividend/Share Annual Growth
Banks/Financial 1 $50 1 $2.50 5%
2 $60 1 $2.75 6%
3 $80 2 $4.00 7.5%
4 $30 3 none 4%
Energy 5 $75 2 $3.00 10%
6 $125 1 $4.50 8%
7 $250 3 none 20%
Consumer Staples 8 $25 1 $.80 5%
9 $40 1 $1.25 6%
10 $90 2 $.50 15%
Health Care 11 $55 1 $1.40 7%
12 $120 1 $3.00 8%
13 $200 1 $4.75 10%
Telecommunications 14 $70 2 $2.00 5.5%
15 $100 3 $0.50 15%
Info Technology 16 $130 1 $1.40 12.5%
17 $150 1 $1.00 10%
18 $50 1 $0.70 15%
Utilities 19 $40 1 $2.40 5%
20 $54 1 $3.00 4%

The risk classifications are (1) = low risk, (2) = moderate risk, and (3) high risk.

The portfolio manager wants to determine the number of shares of each stock to purchase. The
July 19, 2011 @ 01:31 PM
CrackPipeLips

Post: 2008

Join Date: May 2011

what class is this? Financial management?
July 19, 2011 @ 05:49 PM
D

Post: 704

Join Date: May 2011

Location: Bucket West

The class is called: Introduction to Business Analysis and Applications, but i think this is covering financial management, yeah. This is linear programming using excel and solver bro, i just don't know where to start.
July 19, 2011 @ 06:05 PM
cebollo

Post: 212

Join Date: Jun 2008

The first thing to do would be to input all that data into excel. Leave an empty column for share number (this is your only variable it looks like). Then just adjust the number of shares until you get the highest return you think possible.

The other think to consider is the risk factor. for example, Banks/Finance 4 looks like shit. High risk with 4% estimated growth and no dividend return, compared to BFSI 2, moderate risk with 6% estimated growth and $2.50 per share dividend return. Don't know why you would put money into BFSI 4. Whereas Energy 3 has high risk and no dividend return, but 20% estimated growth.
July 19, 2011 @ 06:17 PM
adoboFosho

Post: 2994

Join Date: Apr 2007

i know who not to trust my munny to now hehe

http://www.ebay.com/usr/adobo_fosho... selling black/white flyknits... look like yeezy!!!

July 19, 2011 @ 06:42 PM
eez

Post: 249

Join Date: Jun 2007

Location: 310WESTLA

damn dude, clean that shit up with excel first. what a clusterfuck to read
July 19, 2011 @ 07:00 PM
TheCityOfChi

Post: 4615

Join Date: Nov 2006

The answer is























tl;dr
July 20, 2011 @ 12:01 PM
swagasfuck

Post: 877

Join Date: Jun 2008

annual growth times price. forget about stocks that are rated a 3. basically, just run numbers and try to maximize the value of the portfolio for the year.
July 20, 2011 @ 12:32 PM
D

Post: 704

Join Date: May 2011

Location: Bucket West

thanks guys i figured the constraints out and shit. sorry for not cleaning it up, i tried to but when i submitted it it came out looking like shit for some reason. thanks to everyone for the input, this is what i came up with:

Maximize z = $52.5x1+$63.6x2+$86x3+$31.2x4+$82.5x5+$135x6+$300x7+$26.25x8+$42.4x9+$103.5x10+$58.85x11+$129.6x12+$220x13+$73.85x14+$115x15+$146.25x16+$165x17+$57.5x18+$42x19+$56.16x20

s.t.
A. $52.5x1+$63.6x2+$86x3+$31.2x4+$82.5x5+$135x6+$300x7+$26.25x8+$42.4x9+$103.5x10+$58.85x11+$129.6x12+$220x13+$73.85x14+$115x15+$146.25x16+$165x17+$57.5x18+$42x19+$56.16x20 <= $10,000,000

C. 50x1+60x2+80x3+30x4 => $1,500,000

D. 55x11+120x12+200x13 => $2,000,000

E. 25x8+40x9+90x10 <= $750,000

F-1. 130x16 => $400,000

F-2. 150x17 => $400,000

F-3. 50x18 => $400,000

G. 80x3+75x5+90x10+70x14 <= $750,000

H. 30x4+250x7+100x15 - .05(50x1+60x2+80x3+30x4+75x5+125x6+250x7+25x8+40x9+90x10+55x11+120x12+200x13+70x14+100x15+130x16+150x17+50x18+40x19+54x20) <= 0

I. 22.5x1+2.75x2+4x3+3x5+4.5x6+.8x8+1.25x9+.5x10+1.4x11+3x12+4.75x13+2x14+.5x15+1.4x16+1x17+.7x18+2.4x19+3x20 => 400,000

J. 130x16+150x17+50x18 - 2(25x8+40x9+90x10+40x19+54x20) => 0

K. x14+x15 <= 7,500 shares

now im just having problems with excel's solver add-in due to my lack of excel skills, but i still have a few more days before i hand this shit in.
July 20, 2011 @ 01:07 PM
yoon

Post: 1400

Join Date: Oct 2008

Location: earth

fuck im business major and this looks hard as fuck wth

www.ronindivision.com

July 20, 2011 @ 04:00 PM
Phil Jackson

Post: 224

Join Date: May 2011

Location: da bench

July 20, 2011 @ 07:35 PM
kmz

Post: 903

Join Date: Mar 2008

Location: LA

algebra 1
July 20, 2011 @ 08:12 PM
D

Post: 704

Join Date: May 2011

Location: Bucket West

fuck im business major and this looks hard as fuck wth


Nah brah, it's pretty simple. The only thing that sucks is using excel solver since I barely know anything about excel. If someone can plug those constraints into solver and tell me the numbers you get, let me know, please.

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