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A trust officer at the Blacksburg National Bank needs to determine how to invest $The officer wants to invest at least 50% of the money in short term...

A trust officer at the Blacksburg National Bank needs to determine how to invest $The officer wants to invest at least 50% of the money in short term issues and no more than 50% in high risk issues. At least 30% of the funds should go in tax free investments and at least 40% of the total annual return should be tax free.
a. formulate an LP model for this problem.
b. create a spreadsheet model for the problem and solve it using solver.
c. What is the optimal solution?
Data:
Bond Annual Return Maturity Risk Tax Free
A 9.50% Long High Yes
B 8.00% Short Low Yes
C 9.00% Long Low No
D 9.00% Long High Yes
E 9.00% Short High No

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8499160.xlsx

Answer:
Bond
A
B
C
D
E Annual return Maturity
9.50% Long
8% Short
9% Long
9% Long
9% Short Risk
High
Low
Low
High
High Tax free
Yes
Yes
No
Yes
No Let the money invested in each of the five bonds be...

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