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3 . Your company has $ 9 8 0 , 0 0 0 in a stock brokerage account. As the financial economist of your company,
Your company has $ in a stock brokerage account. As the financial economist of your company, you would like to reinvest the $ 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 expected rates of return.
Investment Opportunity Expected Rate of Return
Corporate Bonds
Technology Stocks
Blue Chip Stocks
Treasury Bonds
The Investment Committee has mandated that at least percent of the investment consist of a combination of corporate and treasury bonds, percent Blue Chip Stock, and no more than percent Technology Stock. Formulate this portfolio selection problem using linear programming, ie determine the objection function and the constraints.
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