An investor wishes to invest some or all of his 125 million

An investor wishes to invest some or all of his $12.5 million in a diversified portfolio through a commercial lender. The types of investments, the expected interest per year, and the maximum allowed percent investment he will consider include the follow

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Investment	Expected Interest	Maximum Allowed
Low-Income mortgage loans	7.00%	20%
Conventional Mortgage loans	6.25%	40%
Government sponsored mortgage loans	8.25%	25%
Bond Investments	5.75%	12%
Stock Investments	8.75%	15%
Futures Trading	9.50	10%

Solution

Investor would choose action which will maximise his/her returns. So the ideal process is to choose such investments highest expected interest first and then going down chronologically. So the investment would be done in following manner Investment Expected Interest Max Allowed Allocation Leftover Futures Trading 9.50% 10% 10% 90% Stock Investments 8.75% 15% 15% 75% Government sponsored mortgage loans 8.25% 25% 25% 50% Low-Income mortgage loans 7.00% 20% 20% 30% Conventional Mortgage loans 6.25% 40% 30% 0% Since the funds get exhausted, 30% funds will be allocated to Conventional Mortgage loans as against 40% allowed. Further, no investments shall be done in Bonds.