## mmbuckaroos 4 years ago An investor has \$300,000 to invest in two types of investments. Type A pays 4% annually and type B pays 5% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment?

1. Brandon Lam

0.04(\$300.000(1/3)=0.04(100.000) Plan A=\$4000 0.05(300.000-100.000) 0.05(200.000) Plant B=\$10.000

2. mmbuckaroos

Ok so I had something similar to this but the answers I can choose from don't match....

3. rcw658

you would want to have as much as possible in type B because it pays more. The most you could have is \$200,000 due to the condition. So it is \$100,000 to type A and \$200,000 to type B

4. mmbuckaroos

My answer choices are: A.\$100,000 in type A (4%), \$200,000 in type B (6%) B. \$0 in type A (4%), \$300,000 in type B (6%) C.\$200,000 in type A (4%), \$100,000 in type B (6%) D.\$300,000 in type A (4%), \$0 in type B (6%) E.\$110,000 in type A (4%), \$190,000 in type B (6%)

5. rcw658

Yeah its A

6. mmbuckaroos

Ok so how did you come up with those numbers....

7. mmbuckaroos

because I have another problem: An investor has \$600,000 to invest in two types of investments. Type A pays 7% annually and type B pays 9% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment? I am assuming then it is the same scenario so my choices would either be: a.\$200,000 in type A (7%), \$400,000 in type B (9%) b.\$210,000 in type A (7%), \$390,000 in type B (9%)

8. mmbuckaroos

?

9. mmbuckaroos

Nevermind I figured it out thanks anyways