Question
A couple has up to $40,000 to invest in mutual funds. Their broker recommends investing in two funds based on their average annual return for
A couple has up to $40,000 to invest in mutual funds. Their broker recommends investing in two funds based on their average annual return for 5 years ending on December 31, 2009: The Templeton Global Bond fund yielding 6.7% and the Franklin International Small Cap Growth fund yielding 8.9%. After some consideration the couple decides to invest at most $15,000 in the Franklin International Small Cap Growth fund and at least $18,000 in the Templeton Global Bond Fund. What should the broker recommend if the couple wants to maximize the return on their investment? Graphical representation of the solution is required for this problem.
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