(Solution) - Recall the Inn is Investments problem Chapter 2 Problem 39 -(2025 Original AI-Free Solution)

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Recall the Inn is Investments problem (Chapter 2, Problem 39). Letting
S = units purchased in the stock fund
M = units purchased in the money market fund
Leads to the following formulation:
Min 8S + 3M
s.t.
50S + 100M ? 1200000 funds available
5S + 4M ? 60000 Annual incomes
M ? 3000 Units in money market
S, M ? 0
The computer solution is shown in Figure 3.16.
a. What is the optimal solution, and what is the minimum total risk?
b. Specify the objective coefficient ranges.
c. How much annual income will be earned by the portfolio?
d. What is the rate of return for the portfolio?
e. What is the dual value for the funds available constraint?
f. What is the marginal rate of return on extra funds added to the portfolio?
Figure 3.16