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We would use linear programming to solve the question.

The aim is to maximize return on investment subject to given constraints.

Objective function: Maximize Z = 7X1 + 12X2 + 8X3 + 14X4


Here, X1 is the amount invested in Corporate Bonds
X2 is the amount invested in Gold stocks
X3 is the amount invested in Mortgage securities
X4 is the amount invested in Construction loans
Subject to:
X1 , X2 , X3 and X4   1250000 (25% of 5 Million)
2X2  X1 (atleast 2$ in corporate bond for every 1$ in gold)
X3 + X4  2250000 (Atleast 45% in mortgage and construction)

( Risk constraint)

X1 + X2 + X3 + X4   5000000 (Total available fund)


The excel formulation is shown below:

The solver is shown below:


The solution is shown below:
Thus total amount invested is $4125000
Thus ICT should make following investments:
 $1250000 in Corporate bonds
 $625000 in Gold stocks
 $1125000 in Mortgage securities and
 $1125000 in Construction loans
Remaining amount i.e. invested in CDs = 5000000 - 4125000 = $875000

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