Problem 3
Many Wall Street firms use LP models to select a desirable bond portfolio. The following is a simplified version of such a model. QUALCOMM is considering investing in four bonds; $1 million is available for investment. The expected annual return, the worst-case annual return on each bond, and the duration of each bond are given in the attached file. (The duration of a bond is a measure of the bond’s sensitivity to interest rates.) QUALCOMM wants to maximize the expected return from its bond investments, subject to three constraints:
Problem 4
The Salem Board of Education wants to evaluate the efficiency of the town’s four elementary schools. The three outputs of the schools are
- output 1 = average reading score
- output 2 = average mathematics score
- output 3 = average self-esteem score
The three inputs to the schools are
- input 1 = average educational level of mothers (defined by highest grade completed: 12 = high school graduate; 16 = college graduate, and so on)
- input 2 = number of parent visits to school (per child)
- input 3 = teacher-to-student ratio
The relevant information for the four schools is given in the tab “Problem 3”. Determine which (if any) schools are inefficient.
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