An investor has at most $10,000 to invest in government bonds, mutual funds, and money market funds. The average yields for the government bonds, mutual funds, and money market funds are 8%, 7%, and 13% respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return in the first year?

An investor has at most $10,000 to invest in government bonds, mutual funds, and money market funds. The average yields for the government bonds, mutual funds, and money market funds are 8%, 7%, and 13% respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return in the first year?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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