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 $29,000, and the investor wants an annual return of $1,800 on the three investments. B. The values in part A are changed to $42,000 and $2,620, respectively. A. The client should invest $ in AAA bonds, $ in A bonds, and $ in B 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 $29,000, and the investor wants an annual return of $1,800 on the three investments. B. The values in part A are changed to $42,000 and $2,620, respectively. A. The client should invest $ in AAA bonds, $ in A bonds, and $ in B bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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