Results 1 to 2 of 2

Math Help - Inverse of Matrixes

  1. #1
    Newbie
    Joined
    Apr 2009
    Posts
    22

    Inverse of Matrixes

    An investment adviser has two mutual funds that she is recommending: a conservative bond fund with an assumed return of 3% a year and a stock fund with a projected return of 11% a year. One client has $29000 to invest and wishes a return of 4% per year, and a second client has $34000 to invest and wants a 8% annual return. How should the adviser allocate the money of each client between the bond fund and the stock fund?

    The only thing I can't figure out is how to get this into 2 equations (ex: x+y = 5 form) to form a matrix so I can find the inverse. The rest I can do. Thanks.
    Last edited by zweevu; February 20th 2010 at 06:54 PM.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Grand Panjandrum
    Joined
    Nov 2005
    From
    someplace
    Posts
    14,972
    Thanks
    4
    Quote Originally Posted by zweevu View Post
    An investment adviser has two mutual funds that she is recommending: a conservative bond fund with an assumed return of 3% a year and a stock fund with a projected return of 11% a year. One client has $29000 to invest and wishes a return of 4% per year, and a second client has $34000 to invest and wants a 8% annual return. How should the adviser allocate the money of each client between the bond fund and the stock fund?

    The only thing I can't figure out is how to get this into 2 equations (ex: x+y = 5 form) to form a matrix so I can find the inverse. The rest I can do. Thanks.
    There is insufficient information unless the investors require exactly the given returns, which is unlikely.

    However assume that it is true. Look at the first investor, if they invest \$a in the bond and \$29000-\$a in the stock the return is:

    \frac{0.04 \times a+0.11 \times (29000-a)}{29000}\times 100 \%=4\%

    which you solve for a.

    CB
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. matrixes
    Posted in the Algebra Forum
    Replies: 4
    Last Post: March 5th 2010, 04:12 AM
  2. Matrixes Arithmetic
    Posted in the Advanced Algebra Forum
    Replies: 1
    Last Post: January 16th 2010, 12:28 PM
  3. Matrixes
    Posted in the Algebra Forum
    Replies: 2
    Last Post: February 26th 2009, 12:58 AM
  4. Stochastic Matrixes
    Posted in the Advanced Statistics Forum
    Replies: 2
    Last Post: December 19th 2008, 11:18 AM
  5. Matrixes
    Posted in the Advanced Algebra Forum
    Replies: 3
    Last Post: June 11th 2008, 04:17 PM

Search Tags


/mathhelpforum @mathhelpforum