<
Question 8, 7.5.28 >
To maximize the expected returns, invest S
Jazmina Enriquez 09/22/22 12:58 AM
in bonds and $
HW Score: 12.5%, 1 of 8
points
O Points: 0 of 1
Suppose that you inherit $12,000. The will states how you must invest the money. Some (or all) of the money must be
invested in stocks and bonds. The requirements are that at least $4000 be invested in bonds, with expected returns
of $0.14 per dollar, and at least $3000 be invested in stocks, with expected returns of $0.17 per dollar. Because the
stocks are medium risk, the final stipulation requires that the investment in bonds should never be less than the
investment in stocks. How should the money be invested so as to maximize your expected returns?
Save
in stocks.