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PB Investments is investing $50,000 for a client into a bond fund paying 4.5% per year...

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General Management

PB Investments is investing $50,000 for a client into a bondfund paying 4.5% per year and into a stock fund paying 6% per year.PB Investments always places 5% of a portfolio into a noninterestbearing cash account for safety. The amount invested into stocksshould be no more than 3 times the amount invested into bonds. Atleast 25% of the market investment should be in bonds. At least 40%of the return should come from bonds.

Formulate into linear programming equations to maximizereturn.

a) PB Investments is investing $50,000 for a client into a bondfund paying 4.5% per year and into a stock fund paying 6% per year.PB Investments always places 5% of a portfolio into a noninterestbearing cash account for safety.

b) The amount invested into stocks should be no more than 3 timesthe amount invested into bonds.

c) At least 25% of the market investment should be in bonds.

d)At least 40% of the Return on Investment should come frombonds.

Answer & Explanation Solved by verified expert
4.1 Ratings (750 Votes)
Let us denote the different instruments with the following variables Amount invested in bond fund x Amount invested in    See Answer
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