The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 8% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 50% of the investment be placed in Treasury notes. It is also decided that no more than 30% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to the objective value. Decision variables: X = $ invested in Treasury notes Y = $ invested in Bonds Objective function (in decimals, eg., .07, NOT 7%): Z=ROI=X+Y Subject to: 1X+1Y 1X+0Y OX+1Y X, Y 20 ▼$250,000 (C₁) ▼$125,000 (C₂) $75,000 (C3) CD Y (in 000) 300- 250- 200- 150- 100- 50- 50 100 C2 150 X (in 000) 200 C1 250 C3 300 Q
The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 8% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 50% of the investment be placed in Treasury notes. It is also decided that no more than 30% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to the objective value. Decision variables: X = $ invested in Treasury notes Y = $ invested in Bonds Objective function (in decimals, eg., .07, NOT 7%): Z=ROI=X+Y Subject to: 1X+1Y 1X+0Y OX+1Y X, Y 20 ▼$250,000 (C₁) ▼$125,000 (C₂) $75,000 (C3) CD Y (in 000) 300- 250- 200- 150- 100- 50- 50 100 C2 150 X (in 000) 200 C1 250 C3 300 Q
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
![The Rio Credit Union has $250,000 available to
invest in a 12-month commitment and wants to invest all of it. The
money can be placed in Brazilian treasury notes yielding an 8% return
or in riskier high-yield bonds at an average rate of return of 9%. Credit
union regulations require diversification to the extent that at least 50%
of the investment be placed in Treasury notes. It is also decided that
no more than 30% of the investment be placed in bonds.
The aim of the objective function for Rio Credit Union should be to
the objective value.
Decision variables:
X = $ invested in Treasury notes
Y = $ invested in Bonds
Objective function (in decimals, eg., .07, NOT 7%):
Z=ROI =
X+ Y
Subject to:
1X + 1Y
1X + OY
OX + 1Y
X, Y 20
$250,000 (C₁)
▼$125,000 (C₂)
▼$75,000 (C3)
CD
Y (in 000)
300-
250-
200-
150-
100-
50-
50
100
C2
150
X (in 000)
200
C1
250
C3
300](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1addf139-0498-4e11-bca0-a0c7874b4001%2F2576ee70-3a3d-4b68-9577-45795cbf8644%2Fuibos2p_processed.png&w=3840&q=75)
Transcribed Image Text:The Rio Credit Union has $250,000 available to
invest in a 12-month commitment and wants to invest all of it. The
money can be placed in Brazilian treasury notes yielding an 8% return
or in riskier high-yield bonds at an average rate of return of 9%. Credit
union regulations require diversification to the extent that at least 50%
of the investment be placed in Treasury notes. It is also decided that
no more than 30% of the investment be placed in bonds.
The aim of the objective function for Rio Credit Union should be to
the objective value.
Decision variables:
X = $ invested in Treasury notes
Y = $ invested in Bonds
Objective function (in decimals, eg., .07, NOT 7%):
Z=ROI =
X+ Y
Subject to:
1X + 1Y
1X + OY
OX + 1Y
X, Y 20
$250,000 (C₁)
▼$125,000 (C₂)
▼$75,000 (C3)
CD
Y (in 000)
300-
250-
200-
150-
100-
50-
50
100
C2
150
X (in 000)
200
C1
250
C3
300
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
![Operations Management](https://www.bartleby.com/isbn_cover_images/9781259667473/9781259667473_smallCoverImage.gif)
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
![Operations and Supply Chain Management (Mcgraw-hi…](https://www.bartleby.com/isbn_cover_images/9781259666100/9781259666100_smallCoverImage.gif)
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
![Operations Management](https://www.bartleby.com/isbn_cover_images/9781259667473/9781259667473_smallCoverImage.gif)
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
![Operations and Supply Chain Management (Mcgraw-hi…](https://www.bartleby.com/isbn_cover_images/9781259666100/9781259666100_smallCoverImage.gif)
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
![Business in Action](https://www.bartleby.com/isbn_cover_images/9780135198100/9780135198100_smallCoverImage.gif)
![Purchasing and Supply Chain Management](https://www.bartleby.com/isbn_cover_images/9781285869681/9781285869681_smallCoverImage.gif)
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
![Production and Operations Analysis, Seventh Editi…](https://www.bartleby.com/isbn_cover_images/9781478623069/9781478623069_smallCoverImage.gif)
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.