1. A portfolio manager has $20 million to invest in a fund consisting of the following bonds: Bond Category Quality Maturity Yield Rating (Years) (Percent) Treasury Bills Treasury Bonds Corporate Bonds Municipal Bonds Junk Bonds 5.0 5.0 3.5 3.0 1.0 0.4 4.0 3.2 2.0 2.5 4.0 6.0 4.4 5.6 8.0 The manager has listed the bonds in descending order of quality rating. The second column lists the average maturity in years (i.e. how long it takes). The final column gives the yield (in percent per year after tax) for each bond (Reminder: yield determines the return, bigger yield means larger return). The manager intends to create a bond fund by investing proportions of $20 million in the different securities and has announced an investment goal of a high-quality,medium-maturity portfolio. In particular, the fund's average quality rating, but be at least 3.5, and its average maturity should be no shorter than 1.5 years, but no longer than 2.5 years. The portfolio manager is seeking the highest expected return subject to the quality and maturity requirements given above. What proportion of the $20 million should be invested in each type of bond? 1. A portfolio manager has $20 million to invest in a fund consisting of the following bonds: Bond Category Quality Maturity Yield Rating (Years) (Percent) Treasury Bills Treasury Bonds Corporate Bonds Municipal Bonds Junk Bonds 5.0 5.0 3.5 3.0 1.0 0.4 4.0 3.2 2.0 2.5 4.0 6.0 4.4 5.6 8.0 The manager has listed the bonds in descending order of quality rating. The second column lists the average maturity in years (i.e. how long it takes). The final column gives the yield (in percent per year after tax) for each bond (Reminder: yield determines the return, bigger yield means larger return). The manager intends to create a bond fund by investing proportions of $20 million in the different securities and has announced an investment goal of a high-quality,medium-maturity portfolio. In particular, the fund's average quality rating, but be at least 3.5, and its average maturity should be no shorter than 1.5 years, but no longer than 2.5 years. The portfolio manager is seeking the highest expected return subject to the quality and maturity requirements given above. What proportion of the $20 million should be invested in each type of bond