Stock Brokers Linear Programming Problem
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The stock brokerage firm has analyzed and recommended two stocks to an investors' club of college professors. The professors were interested in factors such as short-term growth, intermediate growth, and dividend rates. These data on each stock are as follows:
Factor Louisana Gas & Power Trimex Insulation Co.
Short-term growth .36 .24
potential, per dollar
invested
Intermediate growth 1.67 1.50
potential(over next 3
yrs) per $ invested
Dividend rate 4% 8%
Each member of the club has an investment goal of 1)an appreciation of no less than $720 in the short term 2) an appreciation of least $5000 in the next 3 yrs and 3) a dividend income of at least $200 per year. What is the smallest investment that a professor can make to meet these three goals?
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Solution Summary
A stock investment problem is formulated as a LPP and solved by using solver of MS Excel.
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