$12.$

Investment

Projected Return

Risk factor

Petroleum

$14\mathrm{.}0\%$

$5$

Stocks

$16\mathrm{.}5\%$

$7$

Gold

$10\mathrm{.}0\%$

$2$

Real Estate

$12\mathrm{.}0\%$

$3$

ABC trust company must decide to invest $$8$million. Assume the company will invest the whole money.

In addition, ABC imposed the following restrictions on the investment:

$1.$ No single investment alternative should account for more than $40\%$ of budget

$2.$ Amount invested in Gold and Real Estate combined must be at least twice that invested in Petroleum

$3.$ The risk associated with Stocks should not exceed twice the risk associated with Real estate

$4.$ Investment in Real estate should exceed investment in Stocks by no more than $$1$ million

$5.$ Weighted Average risk factor should be no more than $5.$

How much should ABC invest in each alternative to maximize dollar return on investment?