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September 19, 2014

Homework Help: Maths

Posted by Sarah on Tuesday, December 8, 2009 at 6:43am.

An Investment Fund manager is required to maximise the return on a portfolio of bonds given the following information:
Bond types Projected rate of return
Benchmark government 9.1
UK gilts 10.3
Global investment grade (US $) 6.7
Global investment grade (euro) 8.7
Global investment grade () 5.9
High yield emerging market 8.8
The limitations imposed on the fund manager are:
(i) The sum of Global investment grade (US $) and global investment grade () bonds cannot be less than 30% of the total investment.
(ii) Global investment grade (euro) is required to be no more than 20% of the total investment.
(iii) The sum of Benchmark government, UK gilts and high yield emerging market bonds must account for at least 40% but no more than 50% of the total investment.
(iv) The sum allocated to the portfolio is 250 million.
(v) The sum of Global investment grade (US $) and global investment grade () cannot exceed 50% of the total investment.

(a) Formulate the linear programme in standard form to maximise the projected return.

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