What are the decision variables and objective function

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Reference no: EM131471287

A company investsin various types of security. They have $9 million for immediate investment and wish to maximize the interest earned over the next year. Risk is not a factor. Preferred investment alternatives include Bonds (B), Stocks (S), Gold (G), Land (L), BitCoin* (C), and famous Art Masterpieces (M). The expected return for Bonds is 5%, Stocks 12%, Gold 11%, Land 4%, BitCoin 2%, and Art Masterpiece 3%. The maximum amount to be invested for each alternative is $2 million for Bonds, $1 million for Socks, $2 million for Gold, $1 million for Land, $2 million for BitCoin, and $3 million for Art Masterpieces. To structure the portfolio, the Senior VP has specified that at least 20% of the investment should be in corporate Bonds, common Stocks, and BitCoin; and no more than 35% of the investment is to be in Gold and Land. In addition, the total investments on Bond, Stocks, and Gold should be greater than the total amount of money invested on Land, BitCoin and Art Masterpieces. The objective is to maximize the return. Formulate a linear model.

BitCoin: an innovative consensus payment network that enables a new payment system and a completely digital money.

(You don't have to solve this problem using either Excel or QM)

A. What are the Decision Variables?

B. What is the Objective Function?

C. What are the Constraint Equations including non-negativity constraints?

Reference no: EM131471287

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