Chapter 4 (include your formulations, solver files, and optimal solutions) 4-1) A credit union wants to make investments in the following: Type of Investment Vehicle loans Annual Rate of Return () 7 Consumer loans 9 Other secured loans 10 Signature loans Risk-free securities 11 8 The firm will have $3,500,000 available for investment during the coming year. The following restrictions apply: 1) Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total. 2) Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans). 3) Consumer loans plus other secured loans may not exceed the vehicle loans. 4) Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $3,500,000 be allocated to each alternative to maximize annual return? What is the annual return?

Chapter 4 (include your formulations, solver files, and optimal solutions) 4-1) A credit union wants to make investments in the following: Type of Investment Vehicle loans Annual Rate of Return () 7 Consumer loans 9 Other secured loans 10 Signature loans Risk-free securities 11 8 The firm will have $3,500,000 available for investment during the coming year. The following restrictions apply: 1) Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total. 2) Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans). 3) Consumer loans plus other secured loans may not exceed the vehicle loans. 4) Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $3,500,000 be allocated to each alternative to maximize annual return? What is the annual return?

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section: Chapter Questions

Problem 5DQ

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