An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin

Exercise 19

Refer to Problem 10 and the computer solution shown in Figure 3.16.
a. Suppose the risk index for the stock fund (the value of C S ) increases from its current value of 8 to 12. How does the optimal solution change, if at all?
b. Suppose the risk index for the money market fund (the value of C M ) increases from its current value of 3 to 3.5. How does the optimal solution change, if at all?
c. Suppose C S increases to 12 and C M increases to 3.5. How does the optimal solution change, if at all?