5. A financial adviser can invest up to $90,000 in funds to invest in stocks, corporate bonds, and government bonds. The average returns on stocks, corporate bonds, and government bonds are 8%, 5%, and 3%, respectively. If she decides to invest in stocks, the amount cannot exceed half of the total fund, and the difference between the amount invested in corporate bonds and government bonds cannot exceed 20% of the investment amount. Try to calculate how much each security should be invested in order to get the maximum return. (a) Try to define variables for the above problem and establish its linear programming model. (b) Use the simplified method to solve the above linear programming problem.

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ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
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5. A financial adviser can invest up to $90,000 in funds to invest in
stocks, corporate bonds, and government bonds. The average returns
on stocks, corporate bonds, and government bonds are 8%, 5%, and
3%, respectively. If she decides to invest in stocks, the amount cannot
exceed half of the total fund, and the difference between the amount
invested in corporate bonds and government bonds cannot exceed
20% of the investment amount. Try to calculate how much each
security should be invested in order to get the maximum return.
(a) Try to define variables for the above problem and establish its
linear programming model.
(b) Use the simplified method to solve the above linear programming
problem.
Transcribed Image Text:5. A financial adviser can invest up to $90,000 in funds to invest in stocks, corporate bonds, and government bonds. The average returns on stocks, corporate bonds, and government bonds are 8%, 5%, and 3%, respectively. If she decides to invest in stocks, the amount cannot exceed half of the total fund, and the difference between the amount invested in corporate bonds and government bonds cannot exceed 20% of the investment amount. Try to calculate how much each security should be invested in order to get the maximum return. (a) Try to define variables for the above problem and establish its linear programming model. (b) Use the simplified method to solve the above linear programming problem.
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