a) Generate the objective function b) Generate the budget constraint c) The amount invested in oil should be at least three times the amount invested in the steel industry
The mutual funds Division has allocated $5.0M and is currently looking for investment opportunities to invest these funds, The financial analyst suggested that all new investments be made in the oil industry, steel industry or in government bonds. The analyst identified five investment opportunities:
two from the oil industry, two from the steel and government bonds.
| Types of opportunities | Returns | |
| ABC oil | 0.095 | |
| XYZ oil | 0.085 | |
| Mona Steel | 0.04 | |
| TNT steel | 0.05 | |
| Government Bonds | 0.015 |
For the mutual Funds Division :
a) Generate the objective function
b) Generate the budget constraint
c) The amount invested in oil should be at least three times the amount invested in the steel industry
d) The investment in ABC oil cannot be more than 50 % of total oil industry
e) The investment in TNT steel should be at most 40 % of the total investment in Government Bond
f) The investment in XYZ oil should be at least 20 % of the total funds available but no more than 40%
of total funds
g) The steel industry should not receive more than 30 % of total funds
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