ohn Smith 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 has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest at least 30% of that amount in the bond fund. In addition. he want to select a mix that will enable him obtain a total return of at least 7.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. Solve the problem using Excel Solver computer sloution.

ohn Smith 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 has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest at least 30% of that amount in the bond fund. In addition. he want to select a mix that will enable him obtain a total return of at least 7.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. Solve the problem using Excel Solver computer sloution.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.4: Marketing Models

Problem 29P

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