An Investor Is Developing a Portfolio of Stocks

question 11

Essay

An investor is developing a portfolio of stocks. She has identified 3 stocks in which to invest. She wants to earn at least 11% return but with minimum risk.
The average return for the stocks is:
The covariance matrix for the stocks is:
Let: P_i = proportion of total funds invested in i, i = A, B, C
Formulate the NLP for this problem.

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Definitions:

Net Exports

Net exports are the difference between a country's total exports of goods and services and its total imports of them, representing the external demand for a country’s goods.

Statistical Discrepancy

The difference between two figures that are supposed to match but do not, often found in economic data due to estimation errors or timing differences.

Current Account

A country's trade balance, plus net income and direct payments, representing the difference between a nation's savings and its investment.

Tourist Expenditures

Amount of money spent by visitors in a country on accommodation, food, transportation, entertainment, and other services and goods.