Return on Investment An investment broker is instructed by
Chapter 12, Problem 23(choose chapter or problem)
Return on Investment An investment broker is instructed by her client to invest up to $20,000, some in a junk bond yielding 9% per annum and some in Treasury bills yielding 7% per annum. The client wants to invest at least $8000 in T-bills and no more than $12,000 in the junk bond. (a) How much should the broker recommend that the client place in each investment to maximize income ifhe client insists that the amount invested in T-bills must equal or exceed the amount placed in junk bonds? (b) How much should the broker recommend that the client place in each investment to maximize income if the client insists that the amount invested inT-bills must not exceed the amount placed in junk bonds?
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