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The administrator of a $200,000 trust fund set up by Mr Smith’s will must adhere to certain guidelines. The total amount of $200,000 need not be fully invested at any one time. The money may be invested in 3 different types of securities: a utilities stock paying a 9% dividend, an electronics stock paying a 4% dividend, and a bond paying 5% interest.

Suppose that the amount invested in the stocks cannot be more than half the total amount invested: the amount invested in the utilities stock cannot exceed $40,000 and the amount invested in the bond must be at least $70,000. What investment policy should be pursued to maximize the return?

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