An Investor Has $70,000 To Divide Among Several Instruments

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An Investor Has $70,000 To Divide Among Several Instruments. Municipal Bonds Have An 8.5% Return, C D’s A 5% Return, T-Bills A 6.5% Return, And Growth Stock 13%.

 

The Following Guidelines Have Been Established:

 

No More Than 20% In Municipal Bonds

Investment In Growth Stock Fund Should Be Greater Than Other Three Alternatives.

At Least 10% Invested In Treasury Bills And Municipal Bonds

Less Should Be Invested In Treasury Bills And Growth Stocks Than In CDs And Municipal Bonds By A Ratio Of 1.2 To 1.

All $70,000 Should Be Invested.

Formulate A Model And Solve It Using Computer. How Should The $70,000 Be Allocated To Each Alternative To Maximize Annual Return? What Is The Annual Return?

 

Notes:

 

Attach A Linear Programming Computer File Of The Solution (QM For Windows - Save It As A ".Lin" File). Mac Computer File Is Not Accepted.

Attach A Word File To Answer The Questions: How Should The $70,000 Be Allocated To Each Alternative To Maximize Annual Return? What Is The Annual Return?