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A bank is trying to determine how to invest some assets. At present $500,000 is available for investment in bonds, home loans, auto loans
A bank is trying to determine how to invest some assets. At present $500,000 is available for investment in bonds, home loans, auto loans and personal loans. The annual rate of return on each type is known to be as follows: bonds, 7%; home loans, 8%; auto loans, 13% ; and personal loans, 20%. To ensure that the portfolio is not too risky, the following conditions have to be met: The amount invested in personal loans cannot exceed the amount invested in bonds. Home loan amount cannot exceed auto loan amount. No more than 25% may be invested in personal loans. Which is a not a valid decision constraint? Personal loans cannot exceed 25% of portfolio Amount invested must equal $500,000 Home loan amount cannot exceed auto loan amount Personal loan amount cannot exceed bond loan amount
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The valid decision constraints in this scenario are as follows 1 Personal loans cannot exceed 25 of ...Get Instant Access to Expert-Tailored Solutions
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