You are an investment advisor trying to figure out the portfolio for a high wealth client....

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You are an investment advisor trying to figure out the portfolio for a high wealth client. This client has given you $100,000 to invest. You have four different securities you can invest in with the following rates of returns: treasuries, 5%; bonds, 7%; junk bonds, 8% ; equities, 10%. The client has the following conditions: • Investments in equities cannot exceed the amount invested treasuries. • You can invest no more than $20,000 in junk bonds. • At least 15% of all funds invested must be in equities. Formulate an LP to maximize the client's rate of return. You are an investment advisor trying to figure out the portfolio for a high wealth client. This client has given you $100,000 to invest. You have four different securities you can invest in with the following rates of returns: treasuries, 5%; bonds, 7%; junk bonds, 8% ; equities, 10%. The client has the following conditions: • Investments in equities cannot exceed the amount invested treasuries. • You can invest no more than $20,000 in junk bonds. • At least 15% of all funds invested must be in equities. Formulate an LP to maximize the client's rate of return.

Answer rating: 100% (QA)

To formulate the LP to maximize the clients rate of return we need to define decision variables and ... View the full answer