hapter 7. Crypt-Me-Not Investments, Inc. is a new investment firm that deals exclusively with cryptocurrency investments. An investor wants to invest $75,000 in cryptocurrency next year and approaches them about investing in Solana (SOL), Dogecoin (DOGE), and Bitcoin (BTC) which are currently selling at $175, $1.00, and $26,000 per unit respectively. The expected annual return on each unit of SOL is $250, on each unit of DOGE is $100, and on each unit of BTC if $22,000. Like everyone else, the investor wants to maximize the returns on the investment. The risk index associated with each unit of SOL is 1.6, with each unit of DOGE is 1.8, and with each unit of BTC is 1.1. Crypt-Me-Not recommends not crossing a total risk value of 2500 with their clients investments. Moreover, BTC is the dominant crypto currency, so the investor insists that a minimum of 1 unit of BTC is necessary for the portfolio. Based on these constraints, formulate a Linear Program, and answer the following questions after solving it using Solver in Excel (use two digits after decimal point for your answers). The optimal number of purchased SOL is , DOGE is , and BTC is . The annual maximized returns on this $75,000 investment are expected to be $ . Looking at the sensitivity report, the shadow price for Risk Index is .

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.3: Financial Models

Problem 22P: In the financial world, there are many types of complex instruments called derivatives that derive...

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hapter 7.

Crypt-Me-Not Investments, Inc. is a new investment firm that deals exclusively with cryptocurrency investments. An investor wants to invest $75,000 in cryptocurrency next year and approaches them about investing in Solana (SOL), Dogecoin (DOGE), and Bitcoin (BTC) which are currently selling at $175, $1.00, and $26,000 per unit respectively. The expected annual return on each unit of SOL is $250, on each unit of DOGE is $100, and on each unit of BTC if $22,000. Like everyone else, the investor wants to maximize the returns on the investment. The risk index associated with each unit of SOL is 1.6, with each unit of DOGE is 1.8, and with each unit of BTC is 1.1. Crypt-Me-Not recommends not crossing a total risk value of 2500 with their clients investments. Moreover, BTC is the dominant crypto currency, so the investor insists that a minimum of 1 unit of BTC is necessary for the portfolio. Based on these constraints, formulate a Linear Program, and answer the following questions after solving it using Solver in Excel (use two digits after decimal point for your answers).

The optimal number of purchased SOL is , DOGE is , and BTC is .
The annual maximized returns on this $75,000 investment are expected to be $ .
Looking at the sensitivity report, the shadow price for Risk Index is .

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