Desmond, an individual investor, has £70,000 to divide among several investments, the alternative investments are municipal bonds with an 8.5% annual return, certificates of deposit with a 5% return, treasury bills with a 6.5% return, and a growth stock fund with13% annual return. The investments are all evaluated after one year. However, each investment alternative has a different perceived risk to the investor; thus, it is advisable to diversify. Desmond wants to know how much to invest in each alternative in order to maximum the return.Guidelines1.No more than 20% of the total investment should be in municipal bonds2. The amount invested in certificates of deposit should not be exceed the amount investment in the other three alternatives3. At least 30% of the investment should be in treasury bills and certificates of deposit4.To be safe, more should be invested in CDs and treasury bills than in municipal bonds and the growth stock fund by a ratio of at least 1.2 to 1 5.Desmond wants to invest the entire £70,000.

Task C Find how much to invest in each alternative and the total return for Desmond.

Task D Over what returns from the investment in CDs would be considered? 

Task E Among CDs, Treasury bills and CDs and Total Investment, which one is the most valuable items if you would to seek the advice from financial planner?

Answer rating: 100% (QA)

Total to Invest 70000 Returns Municipal Bonds 850 let this be a ... View the full answer