A credit union wants to make investments in the following: Type of Investment
Question:
A credit union wants to make investments in the following:
Type of Investment Annual rate of return(%)
Vehicle loans 7
Consumer loans 9
Other secured loans 10
Signature loans 11
Risk-free securities 8
The firm will have $2,500,000 available for investment during the coming year. The following restrictions apply:
• Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total.
• Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans).
• Consumer loans plus other secured loans may not exceed the vehicle loans.
• Other secured loans plus signature loans may not exceed the funds invested in riskfree securities.
Please develop the LP formula
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam