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Purchase common stocks in two companies

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A private investor has no more than $10,000 to purchase common stocks in two companies in the financial sector. After reading many analyst's reports on the two companies, she estimates the chance of a 1% loss on her capital investment in Company A and the chance of a 4% loss on her capital investment in Company B, and she has decided that she cannot afford to lose more than $2000. However, from her analysis, she expects to make a 14% profit from her investment in Company A and a 20% profit from her investment in Company B. To maximize total returns on loans made by the bank, P, state the objective function using A and B to represent the two companies, respectively.

Reference no: EM131255451

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