Assignment:
Porter Investments needs to develop an investment portfolio from the following list of possible investments:
The client can invest up to $100,000. The following conditions should be met: (1) If investment Cis chosen, then investment D must also be part of the portfolio, (2) at least four investments should be chosen, (3) of investment A and B, exactly one of these investments should be included, (4) of investments F,G,H-exactly two of these should be included in the portfolio. What investments should be included in the portfolio? Remember the investments is either included or not t cannot be partially included and multiples of the investment cannot be included. Formulate this as a binary linear program and solve in Excel. The objective should be to maximize total return.
a) How many decision variables does this problem have?
b) Not counting the non-negativity constraint how many constraints does this problem have?
c) What is the total return for the portfolio?
d) Which investments should be included in the portfolio?