An investor is planning to divide her investments among high-tech mutual funds, global mutual funds, corporate bonds,
Question:
An investor is planning to divide her investments among high-tech mutual funds, global mutual funds, corporate bonds, municipal bonds, and CDs. Each of these investments has an estimated annual return and a risk factor (see the table). The risk level for each choice is the product of its risk factor and the percentage of the total funds invested in that choice. The total risk level is the sum of the risk levels for all the investments. The investor wants at least 20% of her investments to be in CDs and does not want the risk level to exceed 1.8. What percentage of her total investments should be invested in each choice to maximize the return?
Step by Step Answer:
College Mathematics For Business Economics, Life Sciences, And Social Sciences
ISBN: 978-0134674148
14th Edition
Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker