Question

The Heinlein and Krampf Brokerage firm has just been instructed by one of its clients to invest $250,000 of her money obtained recently through the sale of land holdings in Ohio. The client has a good deal of trust in the in¬vestment house, but she also has her own ideas about the distribution of the funds being invested. In par¬ticular, she requests that the firm select whatever stocks and bonds they believe are well rated, but within the following guidelines:

(a) Municipal bonds should constitute at least 20% of the investment.

(b) At least 40% of the funds should be placed in a combination of electronic firms, aerospace firms, and drug manufacturers.

(c) No more than 50% of the amount invested in municipal bonds should be placed in a high-risk, high-yield nursing home stock. Subject to these restraints, the client's goal is to maximize projected return on investments. The analysts at Heinlein and Krampf, aware of these guidelines prepare a list of high-quality stocks and bonds and their corresponding rates of return.

Perform the four steps and write equations ie define variables, determine objective function, identify constraints, list the non-negativity statement. (no graphing needed)

Answer 1