Question
The international city trusts invests in short term trade credits, corporate bonds gold stocks and construction loans. To encourage a diversified portfolio, the board of
The international city trusts invests in short term trade credits, corporate bonds gold stocks and construction loans. To encourage a diversified portfolio, the board of directors has placed limits on the amount that can be committed to any one type of investment. ICT has $ 5 million available for immediate investment and wishes to do two things : maximise the interest earned on the investment made ove rthe next 6 months and (2) satisfy the diversification requirements as set by the board of directors. The specifics of the investment possibilities are as follows:
In addition , the board specifies that at least 55% of the funds invested must be in gold stock and construction loans and that no less than 15 % be invested in trade credit.
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