The Blue Bell Corporation has $20
million to invest in a diversified portfolio. The investments and their
associated interest rate and risk scores are given in the table below.InvestmentsRate
of ReturnRisk
ScoreTrade
credits9%1.7Corporate
bonds12%1.2Gold
Stocks16%3.7Platinum
stocks10%2.4Mortgage
securities6%2.0Construction
loans16%2.9The
Blue Bell Corporation cannot invest more than 20% into anyone investments at
least 30% must be invested into precious metals and at least
45% must be invested into trade credits and corporate bonds. In additionThe
Blue Bell Corporationhas to limit its
overall risk to no more than 2.0.Formulate the above problem as a linear
programming model.