An investor is establishing an investment portfolio that will include stock and bond funds. She has $1,000,000 to invest, and she does not want the portfolio to include more than 65% stocks.

The average annual return for the stock fund she plans to invest in is 10.2%, whereas the average annual return for the bond fund is 4.8%. She further estimates that the most she could lose in the next year in the stock fund is 6%, whereas the most she could lose in the bond fund is 2%. To reduce her risk, she wants to limit her potential maximum losses to $150,000.

Formulate a linear optimization model for this problem by defining the decision variables, objective function, and all the constraints. Do NOT solve the problem after formulating.