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Benson Bank carriers an investment portfolio of stocks, bonds, and other investment alternatives. Currently $300,000 of funds are available and must be used for new investment opportunities. The four stock options are considering, and the relevant financial data are as follow:

	A	B	C	D
Annual rate of return	12%	15%	5%	7%
Risk measure per dollar invested	3	6	8	2

The risk measure indicates the relative uncertainty associated with the stock in term of the projected annual return; higher values indicate greater risk. The risk measures are provided by the firms top financial advisor.

The bank top management has stipulated the following investment guidelines: The average risk must not exceed 5 (the average is taken form the invested money). Total amount invested in Stock A and B cannot exceed 60% of the total dollar investment. Total amount invested in Stock B and C should account for at least 15% of the total dollar investment. Total amount invested in Stock A and C should not more than the total amount invested in Stock B and D. Total amount invested in Stock D should not more than half of the total amount invested in Stock A and B.

1. Formulate a linear programming model to develop an investment portfolio that maximizes the total annual return.

2. Solve the model using Excel.

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