Question: . 2-2 Wiley Wiz is a mutual fund manager trying to decide how to divide up to $12 million between domestic and foreign stocks. Domestic

. 2-2 Wiley Wiz is a mutual fund manager trying.

. 2-2 Wiley Wiz is a mutual fund manager trying

2-2 Wiley Wiz is a mutual fund manager trying to decide how to divide up to $12 million between domestic and foreign stocks. Domestic stocks have been returning 11% per year and foreign 17%. Naturally, Wiley would like to maximize the annual return from his investments. Still, he wants to exercise some caution. No more that $10 million of the fund should go into domestic stocks and no more than $7 million into foreign. Also, at heast half as much should be invested in foreign as domestic, and at least half as much in domestic as foreign to maintain some balance. (a) Formulate a mathematical program- ming model with 5 main constraints to decide Wiley's optimal investment plan using decision variables x, 4 millions of dollars invested in domestic stocks and X, A millions of dollars invested in for- eign stocks. (b) Enter and solve your model with the class optimization software. (c) Using a 2-dimensional plot, solve your model graphically for an optimal invest- ment plan. (d) On a separate 2-dimensional plot, show graphically that the problem has alterna- tive optimal solutions if rates of return are equal for domestic and foreign

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