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First Securities, Inc, and investment firm, has $500,000 on account. The chief investment officer would like to reinvest all the $500,000 in a portfolio that
First Securities, Inc, and investment firm, has $500,000 on account. The chief investment officer would like to reinvest all the $500,000 in a portfolio that would maximize return on investment while at the same time maintaining a relatively conservative mix of bonds. The following table shows the investment opportunities and rates of return The Board of Directors has mandated that no more than 30 percent of the investment consist of a combination of high-risk bonds, at least 50% percent of investment should be in tax-free (no tax) bonds, Please formulate this portfolio selection problem using linear programming mode. Based on question above and the Excel template below: (c) Please formulate this portfolio selection problem using linear, programming model with decision variables, the objective function, and the constraints (7%) d) Provide formula for cells B6 and C6 (4%) e) Fill the value for cells G2, G3, G4, G5 (4%)
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