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Valley National Bank has $ 1 million in funds to be allocated between home loans, personal loans and auto loans. The annual rates of return
Valley National Bank has $ million in funds to be allocated between home loans, personal loans and auto loans. The annual rates of return for the loans are for home loans, for personal loans and for auto loans. The bank's planning committee has decided that at least of the funds be allocated to home loans.In addition, the planning committee has determined that the amount allocated to personal loans cannot exceed of the amount allocated to auto loans.Question
Assume that Valley National Bank has the original $ million in funds available and that the planning committee agreed to change the requirement that at least of the new funds must be allocated to home loans and allow at least of the funds to be allocated to home loans. Use the shadow price as quoted on the report. What is the shadow price decimals What would the new allocation be and what would the change be on the projected return?
Shadow Price
P
A
$ Return
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