An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 4%, on A bonds 6%, and on B bonds 11%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions?
A. The total investment is $18,000, and the investor wants an annual return of $1,120 on the three investments.
B. The values in part A are changed to $26,000 and $1,620, respectively.
The client should invest $___ in AAA bonds, $___ in A bonds, and $___ in B bonds.
Let the investment in AAA be X, Let the investment in A be Y and Let the investment in B be Z.
We're given that X=2*Z (i)
A) Constraints: X+Y+Z= 18,000 => 3*Z +Y=18,000 (ii)
and 0.04*X+ 0.06*Y +0.11*Z = 1,120 => 6*Y + 19*Z= 112,000 (iii)
by (iii) - 6*(ii) we get Z= 4,000 thus X= 8,000 and Y= 6,0000.
B) By similar approach as above we get
X+Y+Z=26,000 => 3*Z+ Y=26,000 (iv)
0.04*X+ 0.06*Y +0.11*Z = 1620=>6*Y + 19*Z= 162000 (v)
again by (v) - 6*(iv) we get Z=6,000 thus X=12000 and Y=8,000
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The...
An investment firm recommends that a client invest in bonds rated AAA, A, B. The average yield on AAA bond is 4%, on A bonds 6%, and on B bonds 11%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $18,000, and the investor wants an annual return of $1,120 on the three investments. B....
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $26,000 and the investor wants an annual return of $1,620 on the three investments....
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%and on bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond if the total investment is $26.000, and the investor wants an annual return of $1620 on the three investments The client should investsin AAA bonds,...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%,on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $23 000, and the investor wants an annual return of $1430 on the three investments....
The tim, recommends that a cient invest in bonds rated AAA A, and B The average yield on AAA bonds is 5%, on A bonds 7%, and on B bonds 1296 cient wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $29000, and the investor wants an annual return of $2,090 on the three investments B. The...
Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $50,000 to invest. B&R's investment advisor decides to recommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip fund. The Internet fund has a projected annual return of 12%, while the Blue Chip fund has a projected annual return...
Problem 7-27 Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $50,000 to invest. B&R's investment advisor decides to recommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip fund. The Internet fund has a projected annual return of 12%, while the Blue Chip fund has a projected...
Question: Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios d... Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $55,000 to invest. B&R's investment advisor decides to recommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip fund. The Internet fund has...
Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $50,000 to invest. B&R's investment advisor decides to recommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip fund. The Internet fund has a projected annual return of 12%, while the Blue Chip fund has a projected annual return...
Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R this past week has a maximum of $55,000 to invest. B&R's investment advisor decides to recommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip fund. The Internet fund has a projected annual return of 11%, while the Blue Chip fund has a projected annual return...