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A person earns $55,000 a year and has $9,000 to invest in a portfolio. The investment alternatives and their expected returns are shown in the
A person earns $55,000 a year and has $9,000 to invest in a portfolio. The investment alternatives and their expected returns are shown in the following table. The investment goals are as follows and can be ranked according to the weights shown in parentheses. Which investments should be included in the portfolio, and how much should be invested in each? Goal 1: (25) Invest all funds available. Goal 2: (20) Maximize the total annual return in dollars, with a target of $1,000. Goal 3: (15) Invest at least 3% of salary in the employer's retirement plan. Goal 4: (15) Invest at least 10% of the total investment in the money market. Goal 5: (10) Invest at most 25% of the total investment in retirement plans. Goal 6: (10) Invest at least 50% of the total investment in nonretirement plans. Goal 7: (5) Invest at most 50% of the total investment in mutual funds
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