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