SOLUTION: The administrator of a $200,000 trust fund set up by Mr Smith's will must adhere to certain guidelines. The total amount of $200,000 need not be fully invested at any one time. The

Question 25085: The administrator of a $200,000 trust fund set up by Mr Smith's will must adhere to certain guidelines. The total amount of $200,000 need not be fully invested at any one time. The money may be invested in 3 different types of securities: a utilities stock paying a 9% dividend, an electronics stock paying a 4% dividend, and a bond paying 5% interest. Suppose that the amt invested in the stocks cannot be more than half the total amount invested:the amt invested in the utilities stock cannot exceed $40,000 and the amt invested in the bond must be at least $70,000......what investment policy should be pursued to maximize the return?
Answer by wuwei96815(245) (Show Source): You can put this solution on YOUR website!
Perhaps I don't understand the problem, but I would put 40,000 in utilities at 9% and 160,000 in bonds at 5%. I would avoid the other stock because it is only paying 4%.
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