A man would like to invest P50,000 in government bonds and stocks that will give an overall annual return of 5%. The money to be invested in government bonds will give an annual return of 4.5% and the stocks of about 6% annual return. The investments are in units of P100 each. If he desires to keep his stock investment to a minimum in order to reduce his risk, determine how many government bonds and how many stocks should he purchase?
A man would like to invest P50,000 in government bonds and stocks that will give an overall annual return of 5%. The money to be invested in government bonds will give an annual return of 4.5% and the stocks of about 6% annual return. The investments are in units of P100 each. If he desires to keep his stock investment to a minimum in order to reduce his risk, determine how many government bonds and how many stocks should he purchase?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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SHOW COMPLETE SOLUTIONS. DRAW CASH FLOW DIAGRAMS.
Transcribed Image Text:3. A man would like to invest P50,000 in government bonds and stocks that will give an
overall annual return of 5%. The money to be invested in government bonds will give an
annual return of 4.5% and the stocks of about 6% annual return. The investments are in
units of P100 each. If he desires to keep his stock investment to a minimum in order to
reduce his risk, determine how many government bonds and how many stocks should he
purchase?
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