An investor has $20,000 to invest in a portfolio of three accounts. Account 1 offers a return of 2% and at a low risk. Account 2 offers a return of 4% and has a medium risk. Account 3 offers a return of 5% but at a relatively high risk. He decided to invest no more than $3000 into account 3 and at least twice as much in Account 1 into the investment of Account 2.
a) Formulate this as a linear programming problem ( i.e. specify constraint equations and objective function aimed at maximizing the overall return on investment)
b) Specify this problem in Microsoft Excel
c) Use Excel’s solver add-in to determine what amounts should be invested in each account in order to maximize the year and return?
I am having trouble constructing this as a linear programming problem. I do not know how to incorporate the the low, medium, and high risks into the objective and/or constraint problems. Below is what I have so far. If you could help for part B or C. It would be very helpful.
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