Linear Programming Model of Different Funds
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You have $23,000 to invest, and three different funds from which to choose. The municipal bond fund has a 6% return, the local bank's CDs have an 8% return, and the high risk account has an expected (hoped-for) 12% return. To minimize risk, you decide not to invest any more than $2,000 in the high-risk account. For tax reasons, you need to invest at least three times as much in the municipal bonds as in the bank CDs. Assuming the year-end yields are as expected, what are the optimal investment amounts?
Please establish the linear programming model for the problem.
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Solution Summary
The expert examines a linear programming model for different funds.
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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