Question: Data Investment Possibility Expected Return (%) Maximum Allowance Treasury Bills 6.5 35000 CD 5 35000 Stock Fund 13 35000 Municipal Bonds 8.5 35000 An investor
| Data | ||
| Investment Possibility | Expected Return (%) | Maximum Allowance |
| Treasury Bills | 6.5 | 35000 |
| CD | 5 | 35000 |
| Stock Fund | 13 | 35000 |
| Municipal Bonds | 8.5 | 35000 |
An investor has $70,000 to divide among 4 investments as given in the table.
The goal is to maximize expected return earned over the next year. All of the $70,000 will be invested.
The following guidelines must be followed:
1. To be safe, more should be invested in CD and Treasury Bills than in Municipal Bonds and Stock Fund.
2. At least 30% of the investment should be in Treasury Bills and CD.
3. To diversify, each of the 4 investments should not be more than 50% of the total investment.
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