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Name: Section: Score: out of 50 Assignment solving linear programming problems using solver (Completed Excel document must be submitted to receive any credit) Problem:

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Name: Section: Score: out of 50 Assignment solving linear programming problems using solver (Completed Excel document must be submitted to receive any credit) Problem: Investing for maximum total return Imagine that you work as a financial advisor. You have a client who would like to invest $850,000 in bonds. You have narrowed down your options to the following list: Rating Company Interest Rate Years to Maturity Acme Chemical 9.65% 11 1- Excellent DynaStar 8.50% 10 3- Good Eagle Vision 8.25% 6 4- Fair Micromodeling 9.75% 10 1- Excellent OptiPro 8.45% 7 3- Good Sabre Systems 10.00% 13 2-Very Good The interest rate describes the return of the investment as the simple interest earned over the length of the bond's life. That is, if $100 is invested in Acme Chemical, the return at the end of the 11 years will be PV 100-0.0965-$9.65. 1. No more than 25% of the total funds should be invested in any one investment. 2. At least half should be invested in long-term bonds that mature in ten years or more. 3. No more than 35% of the total funds should be invested in the combination of DynaStar, Eagle Vision, and Optipro 4. The last stipulation is that all $850,000 must be invested. If the goal is to maximize your client's total return on the investment, how much should they invest in each of the six bonds? What is the corresponding maximum total return they can expect to receive? 1. (6 points) Define the variables of the problem (don't forget to include a unit/quantifier for each!). 2. (7 points) Define the objective function.

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