Question
. A bank is attempting to determine where its assets should be allocated in order to maximize its annual return. At present, $750,000 is available
. A bank is attempting to determine where its assets should be allocated in
order to maximize its annual return. At present, $750,000 is available for
investment in three types of mutual funds: A, B, and C. The annual rate of return
on each type of fund is as follows: fund A, 15%; fund B, 12%; fund C; 13%. The
bank
's manager has placed the following restrictions on the bank's portfolio:
1. No more than 20% of the total amount invested may be in fund A
2. The amount invested in fund B cannot exceed the amount invested in fund C
Determine the optimal allocation that maximizes the bank's annual return.
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