The investment example adopts this multi-objective approach to Bank Three. Bank Three has a modest $20 million capital, with $150 million in demand deposits (checking accounts) and $80 million in time deposits (savings accounts and certificates of deposit).

Table A displays the categories among which the bank must divide its capital and deposited funds. Rates of return are also provided for each category together with other information related to risk.

Table A: Bank Three Investment Opportunities

		Return Rate	Liquid Part	Required Capital	Risk Asset?
#	Investment Category	%	%	%	%
1	Cash	0.0	100.0	0.0	No
2	Short Term	4.0	99.5	0.5	No
3	Government: 1-5 years	4.5	96.0	4.0	No
4	Government: 6-10 years	5.5	90.0	5.0	No
5	Government: Over 10 years	7.0	85.0	7.5	No
6	Investment Loans	10.5	0.0	10.0	Yes
7	Mortgage Loans	8.5	0.0	10.0	Yes
8	Commercial loans	9.2	0.0	10.0	Yes

To complete the model of bank Three