Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor has $ 7 0 , 0 0 0 to invest in a CD and a mutual fund. The CD yields 6 % and

An investor has $70,000 to invest in a CD and a mutual fund. The CD yields 6% and the mutual fund yields 8%. The mutual fund requires a minimum investment of $8,000, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the return? What is the maximum return?
A. To maximize income, the investor should place ? in CDs and ? in the mutual fund. (Round to thenearest dollar as needed.
B. The maximum return is ?(Round to the nearest dollar as needed.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Course In Derivative Securities

Authors: Kerry Back

2005th Edition

3540253734, 978-3540253730

More Books

Students also viewed these Finance questions

Question

To solve p + 3q = 5z + tan( y - 3x)

Answered: 1 week ago

Question

2. What are the different types of networks?

Answered: 1 week ago