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ID: 3035493 • Letter: #
Question
**Please answer FULL questions and make answers clear and readable. Thank you!***
An investment club has set a goal of earning 15% on the money they invest in stocks. The members are considering purchasing three possible stocks, with their cost per share (in dollars) and their projected growth per share (in dollars) summarized in the table. (Let x = computer shares, y = utility shares, and z = retail shares.)
(a) If they have $392,000 to invest, how many shares of each stock should they buy to meet their goal? (If there are infinitely many solutions, express your answers in terms of z as in Example 3.)
(x, y, z) =
(b) If they buy 1100 shares of retail stock, how many shares of the other stocks do they buy?
What if they buy 2200 shares of retail stock?
(c) What is the minimum number of shares of computer stock they will buy?
What is the number of shares of the other stocks in this case?
(d) What is the maximum number of shares of computer stock purchased?
(e) What is the number of shares of the other stocks in this case?
Explanation / Answer
a)
b) If 1100 Retails stocks are bought:
If 2200 Retails stocks are bought:
c) This is one of the solutions:
d) and e) One solution is not to buy other tocks at all
Computer Utility Retail Total Cost per share 30 44 26 Growth per share 6 6 2.4 Growth rate 20% 13.64% 9.23% No. Of share 5000 3700 3046 11746 Amount invested 150000 162800 79196 391996 Expected returns 30000 22205.92 7309.791 59515.71 Effective percent earned 15.18%Related Questions
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