Question
As a 401K retirement plan participant, you have to make personal decisions regarding your own investment objectives. Suppose you have $10,000 to divide among four
As a 401K retirement plan participant, you have to make personal decisions regarding your own investment objectives. Suppose you have $10,000 to divide among four investment alternatives in your 401K retirement plan. The investment alternatives and historical returns are as follows; Real Estate (RE) = 8% CD = 4% Mutual Fund (MF) = 6% Bonds = 7% You will follow the investment allocation guidelines below. More money should be in real estate than in CDs, at a rate of at least 2 to 1. [Hint: That means that RE > 2*CD] At least 50% ($5,000) must be in mutual funds and bonds combined. No more than 20% ($2,000) can be in bonds alone. At least 2.5% ($250) must be invested in each alternative. 2 All of the $10,000 must be invested. Questions:
a. (3 Points) In cell B3, use the Excels built-in function named SUMPRODUCT to write a formula for the objective function. Be sure to reference the appropriate cells.
b. (4 Points) In cells B9:E9, enter the investment return coefficients for the objective function. Make sure the coefficients are input as proportions, not percentages.
c. (8 Points) In cells B12:E19, enter the constraint coefficients for each of the eight constraints.
d. (4 Points) In cells H12:H19, enter the appropriate constraint right-hand side values.
e. (8 Points) In cells F12:F19, use the SUMPRODUCT function to write a formula for the constraint left-hand side values. Be sure to reference the appropriate cells.
f. (5 Points) In cells G12:G19, write the type of inequality associated with each constraint using either =, or =.
h. (7 points) Setup Excel Solver to use it to solve the model for the maximum return. Keep the optimal solution returned by Solver in the model.
Please show me in Excel.
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