Larry just received a fund of $177,000 from selling his property in Utica. He wants to invest this fund and is considering investing on these four possible investment options: a technology stock, a healthcare stock, a mutual fund, and a one-year certificate of deposit (CD). Larry estimates the return on the technology stock to be about 7.15% and the healthcare stock to be 10.55%. The mutual fund has a return rate of 11%. The CD has a 5% return rate. To diversify his investment, Larry would like the following setups for his investment: 1) At least $35,000 must be invested in CD. 2) The combined investment on the two stocks (technology and healthcare) cannot be more than $115,000 3) No more than $55,000 should be invested in the mutual fund. 4) The investment on the technology stock should be no more than the investment on the healthcare stock Like most investors, Larry wants to maximize the return of his investment. Set up a linear program to help Larry with his investment decision. Clearly define your decision variables and list your objective function and the constraints. You do NOT need to solve your linear program.
Larry just received a fund of $177,000 from selling his property in Utica. He wants to invest this fund and is considering investing on these four possible investment options: a technology stock, a healthcare stock, a mutual fund, and a one-year certificate of deposit (CD). Larry estimates the return on the technology stock to be about 7.15% and the healthcare stock to be 10.55%. The mutual fund has a return rate of 11%. The CD has a 5% return rate.
To diversify his investment, Larry would like the following setups for his investment:
1) At least $35,000 must be invested in CD.
2) The combined investment on the two stocks (technology and healthcare) cannot be more than $115,000
3) No more than $55,000 should be invested in the mutual fund.
4) The investment on the technology stock should be no more than the investment on the healthcare stock
Like most investors, Larry wants to maximize the
Set up a linear program to help Larry with his investment decision. Clearly define your decision variables and list your objective function and the constraints. You do NOT need to solve your linear program.
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