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An investor has $150,000 to invest in investments A and B. Investment A requires a $10,000 minimum investment, pays a return of 12% and has a risk factor of .50. Investment B requires a $15,000 minimum investment, pays a return of 10% and has a risk factor of .20. The investor wants to maximize the return while minimizing the risk of the portfolio. The following Minimax formulation of the problem has been solved in Excel. 1Problem data 2 Expected return 3 Risk rating A. 1200 0.50 10% 0.20 5 Variables 6 Amount invested 7 Minimum required Total $10,000 S15,000 150,000 Weighted 10 Goals 11 Average return Actuala Weights% Deviation 118% 0.22 12 Average risk 13 14 Objective 0 Refer to the exhibit above. What formula goes in cell E11? OD11 C11 O-D11(C11-811)/C11 (C11-B11)/C11 OD11 (C11-B11)
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An investor has $150,000 to invest in investments A and B. Investment A requires a $10,000 minimum investment, pays a return of 12% and has a risk factor of .50. Investment B requires a $15,000 minimum investment, pays a return of 10% and has a risk factor of .20. The investor wants to maximize the return while minimizing the risk of the portfolio. The following Minimax formulation of the problem has been solved in Excel. 1Problem data 2 Expected return 3 Risk rating A. 1200 0.50 10% 0.20 5 Variables 6 Amount invested 7 Minimum required Total $10,000 S15,000 150,000 Weighted 10 Goals 11 Average return Actuala Weights% Deviation 118% 0.22 12 Average risk 13 14 Objective 0 Refer to the exhibit above. What formula goes in cell E11? OD11 C11 D11 (C11-B11)/C11 -(C11-B11)/C11 OD11 (C11-B11)

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