can i get help with q2? An investment company manages portfolios of stocks, bonds, and other investment alternatives.One of the company's clients would like to invest $200,000 in stocks. The client is interested infour specific stocks - A, B, C, and/or D. The company gathered the following relevant financialdata for the four stocks:Stock AStock BStock CStock DPrice per shareAnnual rate of$100$50$80$400.120.080.060.10returnRisk measure0.100.070.050.08per dollarinvestedBased on the above data, the investor has stipulated the following investment guidelines:1. The entire amount of $200,000 must be invested.2. The annual rate of return must be at least 9% of the invested capital of $200,000.3. Not every stock has to be purchased, however, if selected, no one stock can account for morethan 50% of the total dollar investment.4. The total investment in stocks A and B combined must be equal to or greater than the totalinvestment in stocks C and D combined.Q1. Build a linear programming model to develop an investment portfolio that minimizes totalrisk under the above constraints.a) Define the decision making variables.b) Show the objective function.c) Show the constraints.Q2. What is the optimal solution and what is the value of the objective function? Show therelevant portion of the Solver's output. Fully interpret the results.Q3. What are the objective coefficient ranges for the four stocks? Show the relevant portion ofthe Solver's output. Fully interpret these ranges.Q4. Suppose the investor decides that the annual rate of return no longer has to be at least 9%and agrees to at minimum level of 8%. What does the shadow price associated with thisconstraint indicate about a possible change in total risk that could ocur from this lower rate ofreturn? Show the relevant portion of the Solver's output. Fully interpret the results.

As per your question we need to answer question number 2. For answering that I have provided the…

Answered: Q2. What is the optimal solution and…

Q2. What is the optimal solution and what is the value of the objective function? Show the relevant portion of the Solver's output. Fully interpret the results.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.3: Financial Models

Problem 26P

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