MAKATI NATIONAL BANK

Years to Maturity
BOND Amount Invested Return (1- short, 0 - long)
A ₱20,338.98 9.50% 0
B ₱20,338.98 8.00% 1
C ₱29,661.02 9.00% 0
D ₱0.00 9.00% 0
E ₱29,661.02 9.00% 1
Total Invested ₱100,000.00 ₱8,898.31 Total (Short Term)
Amount Available ₱100,000.00 Required

Total (Tax Free Annual

Return) ₱3,559.32
Required ₱3,559.32

Other Assumpitons:
- Minimum investment in short term issues 50%
- Maximum investment in high risk issues 50%
- Minimum investment in tax free investment 30.00%
- Minimum tax free total annual return 40.00%

Let
- X1 - amount invested in Bond A
- X2 - amount invested in Bond B
- X3 - amount invested in Bond C
- X4 - amount invested in Bond D
- X5 - amount invested in Bond E

Max Z =0.095X1 + 0.08X2 + 0.09X3 + 0.09X4 + 0.09X5

Subject to: X1 + X2 + X3 + X4 + X5 = 100,000

X1 + X2 + X3 + X4 + X5 <_ 0.5 (X2 + X5)
X1 + X2 + X3 + X4 + X5 <_ 0.5 (X1 + X4 + X5)
X1 + X2 + X3 + X4 + X5 >_ 0.3 (X1 + X2 + X4)
0.095X1 + 0.08X2 + 0.09X4 >_ 0.40 (0.095X1 + 0.08X2 + 0.09X3 + 0.09X4 + 0.09X5)
X1 + X2 + X3 + X4 + X5 >_ 0
 MAKATI NATIONAL BANK

Years to Maturity Risk Tax Free Status

(1- short, 0 - long) (1-high, 0 -low) (1 - yes, 0 - no)
0 1 1
1 0 1
0 0 0
0 1 1
1 1 0
0 Total (High Risk) 0 Total (Tax Free) 0
₱ 50,000.00 Allowed ₱ 50,000.00 Required ₱ 30,000.00

.09X3 + 0.09X4 + 0.09X5)