SOLUTION: A young couple with $120,000 inheritance wants to invest all this money. They plan to diversify their investments, choosing some of each of the following. Type Cost

Question 876255: A young couple with $120,000 inheritance wants to invest all this money. They plan to diversify their investments, choosing some of each of the following.
Type Cost/share Expected total yield
Growth stocks $30 $4.60
Blue-chip stocks $100 $11.00
Utility stocks $50 $5.00
The strategy is to have the total investment in growth stocks equal to the sum of the other investments, and their goal is to a 13% return on their investment. How many shares of each type of stock should they purchase ?
Answer by richwmiller(17219) (Show Source): You can put this solution on YOUR website!
g=b+u,
g+b+u=120000,
gi=4.6/30,
bi=11/100,
ui=5/50,
g*gi+b*bi+u*ui=120000*.13
g=60000 b=40000 u= 20000

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