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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
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. In addition, the credit union invests in riskfree securities to stabilize income. The various revenueproducing investments together with annual rates of return are as follows:
tableType of LoanInvestment Annual Rate of Return Automobile loans,Furniture loans,Other secured loans,Signature loans,Riskfree securities
investments:
Riskfree securities may not exceed of the total funds available for investment.
Signature loans may not exceed of the funds invested in all loans automobile furniture, other secured, and signature loans
Furniture loans plus other secured loans may not exceed the automobile loars:
Other secured loans plus signature loans may not exceed the funds invested in tiststife securities:
How should the $ million be allocated to each of the loaninvestment alternatives to maximize total annual return?
tableType of LoanInvestmentFund AllocationAutomobile loans,$
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