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The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans

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The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to Its members; th addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing investrments together with annual rates of return are as follows: The credit union will have $2 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: - Risk-free securities may not exceed 25% of the total funds avaliable for investment. - Signature loans may not exceed 11% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). - Fumiture loans plus other secured loans may not exceed the automobile loans. - Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $2 million be allocated to each of the loan/investment alternatives to maximize total annual return? What is the projected total annual return? Annual Return =5

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