Question

6) First Securities, Inc., an investment firm, has $380,000 on account. The chief investment officer would like to reinvest the $380,000 in a portfolio that would maximize return on investment while at the same time maintaining a relatively conservative mix of stocks and bonds. The following table shows the investment opportunities and rates of return Investment Opportunit Municipal Bonds High Tech Stock Blue Chip Stock Federal Bonds Rate of Return 0.095 0.146 0.075 0.070 The Board of Directors has mandated that at least 60 percent of the investment consist of a combination of municipal and federal bonds, 25 percent Blue Chip Stock, no more than 30 percent High Tech and Blue Chip Stock, and no more than 15 percent High Tech Stock. Formulate and solve this as a linear programming problem. Explain your findings? 11. Solve the problems # 5 to 9 by using-Excel QM for Windows only. You have to follow the following steps a. Identify decision variables b. Formulate the LP problem by showing objective function and constraints c. Solve the problem by using QM for Windows only. For problem title put your name and problem # d. One page printout showing formulation and optimum solution. For each problem attached the printout with the test paper e. Explain the solution (not more than 1 to 3 sentences)

Answer 1