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1. A retired couple have RM30,000 to invest in a fixed-income security. Their broker recommends investing in two bonds: AAA bond yielding 8% and the
1. A retired couple have RM30,000 to invest in a fixed-income security. Their broker recommends investing in two bonds: AAA bond yielding 8% and the other BBB bond paying 12%. After some consideration, the couple decide to invest at most RM12,000 and at least RM6000 in the BBB bond and AAA bond, respectively. They also want the amount invested in the AAA bond to exceed or equal to the amount invested in the BBB bond. What should the broker recommend if the couple wants to maximize the return of their investment? [20 marks]
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