INVESTMENT PORTFOLIO An investor has up to$250,000 to invest in two types of

Chapter 6, Problem 43

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INVESTMENT PORTFOLIO An investor has up to$250,000 to invest in two types of investments. Type Apays 8% annually and type B pays 10% annually. Tohave a well-balanced portfolio, the investor imposes thefollowing conditions. At least one-fourth of the totalportfolio is to be allocated to type A investments andat least one-fourth of the portfolio is to be allocated totype B investments. What is the optimal amount thatshould be invested in each type of investment? What isthe optimal return?

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