Restrictions regarding the composition of the portfolio

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Reference no: EM131125524

An investor is considering 7 different stocks: A, B, C, D, E, F, and G. The expected annual return for each stock is provided as follows: Annual Stock Return A 9.5% B 8.0% C 7.0% D 10.0% E 8.0% F 9.0% G 10.0% The investor has imposed the following restrictions regarding the composition of the portfolio:

• The portfolio must include exactly one of the following stocks: either A or B.

• If stock B is selected, then stock F must also be selected.

• If stock D is selected, then stock E must be excluded.

Which stocks should be included in the portfolio to maximize the annual return? Note: you need to provide correct LP model and solve it via Excel.

Reference no: EM131125524

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