Investment Advisors Inc. is a brokerage firm that manages stock portfolios for a number of clients. A particular portfolio consists of U shares of US Oil and H shares of Huber Steel. The annual return for US oil is $3 per share and the annual return for Huber Steel is $5 per share. US Oil sells for $25 per share and Huber Steel sells for $50 per share. The portfolio has $80,000 to be invested. A risk index is used to control risk. The risk is 0.50 per share of US Oil and 0.25 per share of Huber Steel. The risk for the portfolio can be at most 700. In addition, the portfolio is limited to a maximum of 1000 shares of US Oil.

Questions:

1) Employ Excel to solve the linear optimization problem. Report the optimal number of shares to buy in each company and the annual return. Submit your spreadsheet.

2) Which constraints are binding?