Your friend has two investment opportunities that she is considering and has asked for your advice regarding
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Your friend has two investment opportunities that she is considering and has asked for your advice regarding how she should proceed. One will have an 9% rate of return on an investment of $12,000; the other will have a 12% rate of return on an investment of $15,000. She would like to take advantage of the higher-yielding investment but has only $12,000 available.
Required:
What is the maximum rate of interest that your friend should be willing to pay to borrow the $3,000 needed to take advantage of the higher yield?
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Calculate the amount of return from each alternative then ...View the full answer
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