Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual return of 9 percent. He has decided to invest no more than 30 percent of the total amount in Fund B and no more than 40 percent of the total amount in Fund C. Michael should allocate to each type of fund to maximize the total annual return. What is the total annual return?
Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual return of 9 percent. He has decided to invest no more than 30 percent of the total amount in Fund B and no more than 40 percent of the total amount in Fund C. Michael should allocate to each type of fund to maximize the total annual return. What is the total annual return?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return
of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual
return of 9 percent. He has decided to invest no more than 30 percent of the total amount in Fund B
and no more than 40 percent of the total amount in Fund C. Michael should allocate to each type of
fund to maximize the total annual return.
What is the total annual return?
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