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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 wellbalanced portfolio, the investor imposes the following conditions. At least onethird of the total portfolio is to be allocated to type A investments and at least onethird of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment?
 3 years ago
 3 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 wellbalanced portfolio, the investor imposes the following conditions. At least onethird of the total portfolio is to be allocated to type A investments and at least onethird of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment?
 3 years ago
 3 years ago

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Brandon LamBest ResponseYou've already chosen the best response.0
0.04($300.000(1/3)=0.04(100.000) Plan A=$4000 0.05(300.000100.000) 0.05(200.000) Plant B=$10.000
 3 years ago

mmbuckaroosBest ResponseYou've already chosen the best response.0
Ok so I had something similar to this but the answers I can choose from don't match....
 3 years ago

rcw658Best ResponseYou've already chosen the best response.0
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
 3 years ago

mmbuckaroosBest ResponseYou've already chosen the best response.0
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%)
 3 years ago

mmbuckaroosBest ResponseYou've already chosen the best response.0
Ok so how did you come up with those numbers....
 3 years ago

mmbuckaroosBest ResponseYou've already chosen the best response.0
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 wellbalanced portfolio, the investor imposes the following conditions. At least onethird of the total portfolio is to be allocated to type A investments and at least onethird 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%)
 3 years ago

mmbuckaroosBest ResponseYou've already chosen the best response.0
Nevermind I figured it out thanks anyways
 3 years ago
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