Question

A conservative investor has $100,000 to invest. The investor has decided to use three vehicles for generating income: Municipal bonds, a certificate of deposit (CD), and a money market account. After reading a financial newsletter, the investor also has identified several additional restrictions on the investments:

a. No more than 40 percent of investment should be in bonds
b. The proportion allocated to the money market account will be at least double the amount in the CD
c. The annual return will be 8% for bonds, 9% for the CD and 7% for the money market account. Assume that the investor wants to maximize the total annual return
Then, formulate the LP model for this problem, ignoring any transaction costs and the potential for different investment

Answer 1

Answer: Here, let X,Y,ZX,Y,Z indicate the amount in dollars to be invested

Step-by-step explanation: Here, let X,Y,ZX,Y,Z indicate the amount in dollars to be invested