Formulate this as goal-programming problem

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Vivek, a certified financial planner, has been asked by a client to invest $500,000. This money may be placed in stocks, bonds, or a mutual fund in real estate. The expected return on investment is 15% for stocks, 7% for bonds, and 11% for real estate. While the client would like a very high-expected return, she would be satisfied with a 12% expected return on her money. Due to risk considerations, several goals have been established to keep the risk at an acceptable level. One goal is to put at least 35% of the money in bonds. Another goal is that the amount of money in real estate should not exceed 50% of the money invested in stocks and bonds combined. In addition to these goals, there is one absolute restriction. Under no circumstances should more than $250,000 be invested in any one area. (a) Formulate this as a goal-programming problem. Assume that all of the goals are equally important. (b) How much money should be put in each of the investment options? What is the total return? Which of the goals are not met?

Reference no: EM132264881

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