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A private investment club has $ 4 , 0 0 0 earmarked for investment in stocks. To arrive at an acceptable overall level of risk,
A private investment club has $ earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high risk, medium risk, and low risk. Management estimates that highrisk stocks will have a rate of return of ear; mediumrisk stocks, ear; and lowrisk stocks, ear. The members have decided that the investment in lowrisk stocks should be a quarter of the sum of the investments in the stocks of the other two categories. Assuming that all the money available for investment is invested, how much should the club invest in each type of stock if the investment goal is to have a return of $ year on the total investment?
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The club should invest $ $ and $ in high risk, medium risk and low risk stocks completely.
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