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A portfolio manager is trying to balance investments between bonds, stocks and cash. The return on bonds is 9 percent, 12 percent on stocks, and
A portfolio manager is trying to balance investments between bonds, stocks and cash. The return on bonds is 9 percent, 12 percent on stocks, and 3 percent on cash. The total portfolio is $1 billion, and he or she must keep 10 percent in cash in accordance with company policy. The fund's prospectus promises that stocks cannot exceed 75 percent of the portfolio. Solve this investment decision as a linear programming problem.
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