Your portfolio manager has suggested two high-yielding stocks: The Altria Group (MO) and Reynolds America (RAI). MO shares cost $50, yield 4.5% in dividends, and have a risk index of 2.0 per share. RAI shares cost $55, yield 5% in dividends, and have a risk index of 3.0 per share. You have up to $7,200 to invest and would like to earn at least $335 in dividends. How many shares (to the nearest whole number) of each stock should you purchase to meet your requirements and minimize the total risk index for your portfolio? What is the minimum total risk index? O a. buy 190 shares of MO and 70 shares of RAI for a minimum total risk index of 310 O b. buy 260 shares of MO and 60 shares of RAI for a minimum total risk index of 600 O c. buy 350 shares of MO and 40 shares of RAI for a minimum total risk index of 620 O d. no solution O e. buy 100 shares of MO and 40 shares of RAI for a minimum total risk index of 320

Intermediate Algebra
19th Edition
ISBN:9780998625720
Author:Lynn Marecek
Publisher:Lynn Marecek
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...
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Your portfolio manager has suggested two high-yielding stocks: The Altria Group (MO) and Reynolds America (RAI).
MO shares cost $50, yield 4.5% in dividends, and have a risk index of 2.0 per share. RAI shares cost $55, yield 5% in
dividends, and have a risk index of 3.0 per share. You have up to $7,200 to invest and would like to earn at least $335
in dividends. How many shares (to the nearest whole number) of each stock should you purchase to meet your
requirements and minimize the total risk index for your portfolio? What is the minimum total risk index?
a. buy 190 shares of MO and 70 shares of RAI for a minimum total risk index of 310
b. buy 260 shares of MO and 60 shares of RAI for a minimum total risk index of 600
O c. buy 350 shares of MO and 40 shares of RAI for a minimum total risk index of 620
d. no solution
e. buy 100 shares of MO and 40 shares of RAI for a minimum total risk index of 320
Transcribed Image Text:Your portfolio manager has suggested two high-yielding stocks: The Altria Group (MO) and Reynolds America (RAI). MO shares cost $50, yield 4.5% in dividends, and have a risk index of 2.0 per share. RAI shares cost $55, yield 5% in dividends, and have a risk index of 3.0 per share. You have up to $7,200 to invest and would like to earn at least $335 in dividends. How many shares (to the nearest whole number) of each stock should you purchase to meet your requirements and minimize the total risk index for your portfolio? What is the minimum total risk index? a. buy 190 shares of MO and 70 shares of RAI for a minimum total risk index of 310 b. buy 260 shares of MO and 60 shares of RAI for a minimum total risk index of 600 O c. buy 350 shares of MO and 40 shares of RAI for a minimum total risk index of 620 d. no solution e. buy 100 shares of MO and 40 shares of RAI for a minimum total risk index of 320
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