Question
A n investment agency has been asked to advise one of its clients how to invest his $100,000 among the 4 assets described below: Units
An investment agency has been asked to advise one of its clients how to invest his $100,000 among the 4 assets described below:
Units of Risk | ||
Assets | per Dollar Invested | Rate of Return |
Northern Mines Shares | 4 | .15 |
Bucklin Automobiles | 3.5 | .11 |
Royal Bank of Commerce Shares | 2 | .07 |
NB Savings Bonds | 1 | .05 |
The client would like as high an annual return as is possible to receive while incurring of an average of no more than 2.5 risk units per dollar invested. The amount invested in Royal Bank cannot exceed $40,000. Furthermore, the investment in Automobiles and Banks combined must be at least $20,000.
(a) Formulate the problem as a linear programming problem (regular or LINDO/LINGO format).Define the variables properly & clearly.What is the optimal solution & what is the average rate of return?
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