Use This Information to Answer the Following Questions -Use the Sensitivity Report to Answer the Following Questions:
A
Essay
Use this information to answer the following questions.
An investment company currently has $1 million available for investment in five different stocks.The company wants to maximize the interest earned over the next year.The five investment possibilities along with the expected interest earned are shown below.To manage risk,the investment firm wishes to have at least 35% of the investment in stocks A and B.Furthermore,no more than 15% of the investment may be in stock E.
-Use the Sensitivity Report to answer the following questions:
a.Suppose that the amount of money available for investment increases by $50,000.What impact would this have on the current optimal objective function value?
b.Suppose that total investment in stocks A and B must be at least 40% of the total amount available for investment (i.e. ,$400,000).What impact would this have on the current optimal objective function value?
c.Suppose that the total investment in stocks A and be must be at least 30% of the total amount available for investment.What impact would this have on the current optimal objective function value?
d.Assume that no more than 30% of the investment may be in stock E.What impact would this have on the current optimal objective function value?
Correct Answer:

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a.The shadow price for this constraint (...View Answer
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