4. A fund manager has P 10 million to invest in treasury bills, bonds, private placements and in risky venture. Relevant

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4 A Fund Manager Has P 10 Million To Invest In Treasury Bills Bonds Private Placements And In Risky Venture Relevant 1 (86.47 KiB) Viewed 57 times

4. A fund manager has P 10 million to invest in treasury bills, bonds, private placements and in risky venture. Relevant information about these various investments are presented below: Investment Yield rate p.a. Risk rating Maturity 3 months Treasury Bill 6% 1 Bonds 8% 5 years 2 Private Placement 12% 6 months 4 Risky Venture 20% 3 years 8 Guidelines given by the fund manager were: a. 50% of the investment must have a maturity below one year b. Investment in Risky venture should not exceed 20% of funds invested. At least 30% should be invested in treasury bills. C. d. Total investments in items risk rating above 3 should not exceed 40% of total funds invested. Formulate an LP model that would optimize return for this portfolio where X1 = investment in Treasury bills, X2 = investment in bonds, X3 = investment in private placement, X4 = investment in risky venture