The National Credit Union has $250,000 available to invest in a 12-month commitment. The money can be

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The National Credit Union has $250,000 available to invest in a 12-month commitment. The money can be placed in Treasury notes yielding an 8% return or in municipal bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 50% of the investment be placed in Treasury notes. Because of defaults in such municipalities as Cleveland and New York, it is decided that no more than 40% of the investment be placed in bonds. How much should the National Credit Union invest in each security so as to maximize its return on investment?


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Quantitative Analysis for Management

ISBN: 978-0132149112

11th Edition

Authors: Barry render, Ralph m. stair, Michael e. Hanna

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