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The Turner-Laberge Brokerage firm has just been instructed by one of its clients to invest $500,000 for her, money obtained recently through the sale of
The Turner-Laberge Brokerage firm has just been instructed by one of its clients to invest $500,000 for her, money obtained recently through the sale of land holdings in British Columbia. The client has a good deal of trust in the investment house, but she also has her own ideas about the distribution of the funds being invested. She requests that the firm select whatever stocks and bonds it believes are well rated but within the following guidelines: At least 25% of the investment should be in a self-directed RRSP account with only Canadian content. At least 45% of the investment should be placed in a combination of U.S. electronics firms, aerospace firms, and pharmaceutical companies. No more than 55% of the amount invested in a self-directed RRSP should be in precious metals. Subject to these restraints, the client's goal is to maximize projected return on investments. The analysts at Turner-Laberge, aware of these guidelines, prepare a list of high-quality stocks and bonds and their corresponding rates of return. Investment Canadian RRSP Thompson Electronics, Inc. (USA) United Aerospace Corp. (USA) Palmer Pharmaceuticals (USA) Alberta Gold Mines (Canada) Projected Rate of Return (%) 5.5 7.2 5.4 8.8 11 a. Formulate a linear programming model for this problem. b. Solve this problem using Excel Solver. Show the Answer Report output. Clearly report the optimal solution. Question 2: Consider the following Linear programming model Maximize: Z = 3X + 2Y subject to: 2X + 1Y 60 2X + 3Y 120 X, Y 0 Find the optimal solution using the graphical method. Identify the feasible solution region and the optimal solution on the graph
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