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