Transaction costs-potential for different investment lives

Assignment Help Operation Management

Reference no: EM131036047

A conservative investor has $97,000 to invest. The investor has decided to use three vehicles for generating income: municipal bonds, a certificate of deposit (CD), and a money market account. After reading a financial newsletter, the investor has also identified several additional restrictions on the investments.

1-No more than 40 percent of the investment should be in bonds.

2-The proportion allocated to the money market account should be at least double the amount in the CD.

The annual return will be 8 percent for bonds, 9 percent for the CD, and 7 percent for the money market account. Assume the entire amount will be invested.

Formulate the LP model for this problem using Lingo software, ignoring any transaction costs and the potential for different investment lives. Assume that the investor wants to maximize the total annual return.

Percent of investment Income 31%

Amount return 4%

Reference no: EM131036047

Questions Cloud

Write and online news release about the new library : Write and online news release about the new library and its planned grand opening. Second, write and e-mail pitch letter to the local media encouraging them to do feature stories about the new library in advance of the opening.

Density of nitrogen in a rubber piece : The solubility of nitrogen gas in rubber at 25°C is 0.00156 kmol/m3 · bar.

Importance of planning for an act of terrorism : 1- Summarize the importance of planning for an act of terrorism and how you would assess your risk to these types of threats.

Call-center employees needed to meet minimum requirements : Epsilon Airlines services predominately the eastern and south eastern United States. The vast majority of Epsilon's customers make reservations through Epsilon's website, but a small percentage of customers make reservations via phone. Develop a mode..

Transaction costs-potential for different investment lives : A conservative investor has $97,000 to invest. The investor has decided to use three vehicles for generating income: municipal bonds, a certificate of deposit (CD), and a money market account. Formulate the LP model for this problem using Lingo softw..

Identify a tourist destination region : Identify a tourist destination region (TDR) that you are familiar with or have recently visited. This selected TDR will be used as a basis for you to compare and contrast relevant theories introduced in the unit to practical aspects of the TDR.

Results of posting a question to linkedin : For this activity, you will discuss the results of posting a question to your LinkedIn (Links to an external site.)network or other social media platform of your choice. Your question should be related to customer value in the marketing domain an..

Write a executive summary about the given book : I need ten pages of executive summary which is to read a book named The Success Principles: How to Get from Where You Are to Where You Want to Be by Jack Canfield and Janet Switzer is a motivational book.

User Account

All Pages