Problem 2-25 (Algorithmic) George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 9% for the bond fund and 20% for the stock fund. Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest at least 60% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 8.5%. a. Formulate linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Let B = percentage of funds invested in the bond fund S= percentage of funds invested in the stock fund B+ s.t. B Bond fund minimum B + Minimum return B + Percentage requirement b. Solve the problem. If required, round the answers to one decimal place. Optimal solution: B = S = Value of optimal solution is %

Problem 2-25 (Algorithmic) George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 9% for the bond fund and 20% for the stock fund. Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest at least 60% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 8.5%. a. Formulate linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Let B = percentage of funds invested in the bond fund S= percentage of funds invested in the stock fund B+ s.t. B Bond fund minimum B + Minimum return B + Percentage requirement b. Solve the problem. If required, round the answers to one decimal place. Optimal solution: B = S = Value of optimal solution is %

Name: Problem 2-25 (Algorithmic)George Johnson recently inherited a large s
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Description: Problem 2-25 (Algorithmic)George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) abond fund and (2) a stock fund. Th

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Concept explainers

Types of Bias

Statistics is the study of data collection, organization, analysis, interpretation, and presentation. Statistical bias is a characteristic of a statistical technique or its findings in which the expected value deviates from the actual root quantitative parameter being estimated. According to the actual definition of bias, it refers to the tendency of a statistic to overestimate or underestimate a parameter.

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Question

Problem 2-25 (Algorithmic)
George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a
bond fund and (2) a stock fund. The projected returns over the life of the investments are 9% for the bond fund and 20% for the stock fund. Whatever portion of the inheritance he finally
decides to commit to the trust fund, he wants to invest at least 60% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at
least 8.5%.
a. Formulate
linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your
answers to three decimal places.
Let B = percentage of funds invested in the bond fund
S= percentage of funds invested in the stock fund
B+
s.t.
B
Bond fund minimum
B+
Minimum return
B +
Percentage requirement
b. Solve the problem. If required, round the answers to one decimal place.
Optimal solution: B =
S =
Value of optimal solution is
%

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