Mr. Perez wants to invest up to $20,000 in two stocks, Cal Computers and Texas Tools. The Cal computers stock is expected to yield a 16% annual return, while the Texas Tools stock promises a 12% yield. Mr. Perez would like to earn at least $2,800 this year. According to Value Line Magazine’s safety index (1 highest to 5 lowest), Cal Computers has a safety number 3 and Texas Tools has a safety number of 2. 

How much money should he invest in each to minimise the safety number? A lower safety number means less risk.

Answer rating: 100% (QA)

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