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2 - 3 2 An investment broker has been given $ 2 5 0 , 0 0 0 to invest in a 1 2 -

2-32 An investment broker has been given $250,000 to invest in a 12-month commitment. The money can
be placed in Treasury notes (with a return of 8% and a risk score of 2) or in municipal bonds (with a
return of 9% and a risk score of 3). The broker's client wants diversification to the extent that
between 50% and 70% of the total investment must be placed in Treasury notes. Also, because of
fear of default, the client requests that the average risk score of the total investment should be no
more than 2.42. How much should the broker invest in each security so as to maximize return on
investment?
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