Chemical Bank Is Attempting to Determine Where Its Assets Should

Essay

Chemical Bank is attempting to determine where its assets should be invested during the current year.At present,$800,000 is available for investment in bonds,home loans,auto loans,and personal loans.The annual rate of return on each type of investment is known to be the following: bonds,12%,home loans,18%,auto loans,15%,personal loans,22%.To ensure that the banks portfolio is not too risky,the bank's investment manager has placed the following restrictions on the bank portfolio:
-No more than 30% of the total amount invested may be in personal loans
-The amount invested in home loans cannot exceed the amount invested in auto loans
-The amount invested in personal loans cannot exceed the amount invested in bonds.
Determine how the bank can maximize the annual return on its investment portfolio.