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San Diego State University Operations And Supply Chain Management Assignment Help - Average

Question - winner of the Texas Lotto has decided to invest $50,000 per year in the stock market. Under
consideration are stocks for a petrochemical firm and a public utility. Although a long-range goal is to
get the highest possible return, some consideration is given to the risk involved with the stocks. A risk
index on a scale of 1-10 (with 10 being the most risky) is assigned to each of the two stocks. The total
risk of the portfolio is found by multiplying the risk of each stock by the dollars invested in that stock.
The following table provides a summary of the return and risk:

The investor would like to maximize the return on the investment, but the average risk index of the
investment should not be higher than 6. How much should be i ...Read More

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