Mr. smith’s requirements for the investment has some money *

| June 4, 2016

Question
Mr. smith’s requirements for the investment has some money to invest. He selected three stocks and two bond funds as possible investments, shown in the following table.

investment risk annual return

stock A high 15%

stock B Medium 12%

Stock C low 9%

Bond-long term 11%

Bond-short term 8%

Some of Mr. Smith’s requirements for the investment are listed below. From answers A to H below, select the correct constraint for each requirement. (x1,x2,x3,x4 and x5 are investment in stock A, stock B, stock C, long term bond and short term bond, respectively)

The total amount invested cannot exceed $50,000_____________

at least 60% of the total investment should be in bonds______________

No more than$12,500 is to be placed in investments with annual returns of less than 10%

At least 40% of the funds invested in stock are to be in low-risk stock (stock C)

A. -0.6×1 – 0.6×2 – 0.6×3 + 0.4×4 + 0.4×5 >= 0

B. x1 + x2 >= 12,000

C. x3 + x5 <= 12,500

D. x3 <= .40

E. x4 + X5 = 0

G. -.4×1 -.4×2 + .6×3 – .4×4 – .4×5 <= 0

H. x1 + x2 + x3 + x4 + x5 <= 50,000

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