1. The International City Trust (ICT) invests in short-term trade credits, corporate bonds, gold stocks, and construction loans. To encourage a diversified portfolio, the board of directors has placed limits on the amount that can be committed to any one type of investment. ICT has $5 million available for immediate investment and wishes to do two things: (1) maximize the return on the investments made over the next 12 months and (2) satisfy the diversification requirements as set by the board of directors. The specifics of the investment possibilities are as follows: Investment Trade credit Corporate bonds Gold stocks Construction loans Annual Interest Maximum Investment Return (s Millions) 7% 1.0 11% 2.5 19% 1.5 15% 1.8 In addition, the board specifies that at least 55% of the funds invested must be in gold stocks and construction loans, and that no less than 15% be invested in trade credit. (a) [2 pts] Define the decision variables. (b) [1 ph] Suppose that $1 million, $2 million, $1 million, and $1 million are invested in trade credit, corporate bonds, gold stocks, and construction loans, respectively. Compute the return on the investments made over the next 12 months. (C) (1 PT] Express, in terms of the decision variables, the return on the investments made over the next 12 months. (d) [1 PT] Suppose that $1 million, $2 million, $1 million, and $1 million are invested in trade credit, corporate bonds, gold stocks, and construction loans, respectively. Are we satisfying the condition that requires that at last 5 of the funds in vested be in gol stocks and construction loans 1 PTExpress, in terms of the decision variables, the construint equiring that at least 55% of the funds invested be in gold stocks and construction ( 11 PT] Suppose that $1 million, 52 million, 51 milline, and 1 million investeel in trade credit, corporate bond gold stocks, and construction loca, espectively Are we satisfying the condition that requires that no less than 1% of the fuck invested be in trade credit 2) 1 | Express in terms of the decision is the construint requiring that no less than 10% of the funds invested be in trade credit (1) 1 PT Express, in terms of the decision variables, the exitstraints requiring that no more than $1 million be invested in trade credit 6 1 PT) Express, in terms of the decision variables, the statenints requiring that no more than $2.5 million be invested in corporate bou. C) I Express, in terms of the decision variables the statuits requiring that 10 more than $1.5 million be invested in gold stories (k) 1 rr Expo, in terms of the decision warishile, the entrants requiring that 10 more than $1.8 million be invested in construction et (0) 1 PT By win the hopivity construint, complete the liner programming model for this problem 2 Maximiae Sisbject to
