Question
A company has $10,000 to invest , to be divided into fixed interest, equities and property. For surety of return the client requires at least
A company has $10,000 to invest , to be divided into fixed interest, equities and property. For surety of return the client requires at least 50% to be placed in fixed interest and for liquidity he specifies that no more than 30% be invested in property. The projected return over the coming year is forecast to be 5% on the fixed interest investments, 7% on equities and 8% on property. How should the 10,000 be split between the three types of investment in order to maximise the return over the coming year? Hint: To formulate the linear programming problem use x as the amount invested in fixed interests, y as the amount invested in equities and then 10,000 - x - y will be the amount invested in property.
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