Questions (Please note that there are two parts in this question: Part a and b) 1. Linear Optimization Cal-Bus Mutual Funds, Inc. located in Pittsburgh. Cal-Bus just obtained $10,000,000 by converting industrial bonds to cash and is now looking for other investment opportunities for these funds. Based on Cal-Bus's current investments, the firm's top financial analyst recommends that all new investments be made in the oil industry, steel industry, or govemment bonds in US and Europe. The investments, locations and rates of retum are shown in the following table. Location Europe New York City Pittsburgh Investment Opportunities for Cal-Bus Mutual Funds Investment B&E Steel Oakland Oil Pittsburgh Steel Projected Rate of Return % 7.3 8.6 6.8 Atlantic Oil 8.9 Pacific Oil 10.5 6.8 6.5 Bonds 4.5 8.2 7.2 7.6 5.3 Huber Steel Midwest Steel Govemment Buckingham Steel Eiffel Oil Florence Oil EU Govemment Bonds What portfolio recommendations-investments and amounts should be made for the available $10,000,000 to maximize the projected rate of return? Please note that you need to develop two mathematical models (two separate excel spreadsheet) for part a and b. 2. The budgetary and managerially imposed constraints are listed below • Cal-Bus should be investing all available $10,000,000. . The Europe investments cannot exceed the 30% of the overall budget. • Total Oil Investments cannot exceed the 50% of the total budget. • Total Steel Investments cannot exceed the 50% of the total budget. • Cal-Bus should invest on Pittsburgh funds at least 20% of the budget. • Cal-Bus should invest on New York City funds at least 25% of the total budget. . Cal-Bus should invest on Europe funds at least 15% of the total budget. • At most 15% of the budget can be spent on govemment bonds. Oil sector investments in Europe should be more than Steel sector investments in Europe. In your report (MS Word File), please include your mathematical model, excel output, and list the amount of investments for each investment opportunity in a table and interpret your findings. b. The upper management of CAL-BUS Mutual Funds also considering another scenario with the following budgetary and managerially imposed constraints • • Cal-Bus should be investing all available $10,000,000. The Europe investments cannot exceed the 20% of the overall budget. • Total Oil Investments cannot exceed the 30% of the total budget. • Total Steel Investments cannot exceed the 50% of the total budget. Cal-Bus should invest on Pittsburgh funds at least 50% of the budget. • • Cal-Bus should invest on New York City funds at least 25% of the total budget. • Cal-Bus should invest on Europe funds at least 15% of the total budget. • At most 45% of the budget can be spent on government bonds. Oil sector investments in Europe should be less than Steel sector investients in Europe. In your report (MS Word File), please include your mathematical model, excel output, and list the amount of investments for each investment opportunity in a table and interpret your findings.