Type of Loan/Investment Annual Rate of Return (%) Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities Type of Loan/Investment Automobile loans Furniture loans The credit union will have $2.3 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: Other secured loans Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% 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 loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $2.3 million be allocated to each of the loan/investment alternatives to maximize total annual return? Signature loans 7 Risk-free securities 10 11 What is the projected total annual return? Annual Return = $ 12 8 Fund Allocation

The credit union will have $2.3 million avaliable for investment during the coming year, State laws and credit unien policies impose the following restrictions on the composition of the loans and investments: - Risk-free securibies may not exceed 30% of the total funds avallable for investment. - Signature loans may not exceed 10% of the funds invested in all loans (automobile, fumiture, other secured, and signature loans). - Furniture 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 $2.3 milion be allocated to each of the loan/investment altematives to maximize total annual return? What is the projected total annual return? Annual Return =$ The credit union will have $2.3 million available for ifvestment during the coming vear. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: - Risk-free secunties may not exceed 30% of the total funds avallable for investment. - Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). - Furniture loans plus other secured loans may not exceed the automoblie loans. - Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $2.3 million be allocated to each of the loan/investment alternatives to moximize total annual return? What is the projected total annual return? Annual Return =5