Formulate a system of equations for the situation below and solve.A private investment club has $400,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classifiedinto three categories: high-risk, medium-risk, and low-risk. Management estimates that high-risk stocks will have a rate of return of 15%/year; medium-risk stocks, 10%/year; and low-riskstocks, 7%/year. The members have decided that the investment in low-risk stocks should be equal to the sum of the investments in the stocks of the other two categories. Determine howmuch the club should invest in each type of stock if the investment goal is to have a return of $40,000/year on the total investment. (Assume that all the money available for investment isinvested.)high-risk stocksmedium-risk stockslow-risk stocksSA$

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Answered: Formulate a system of equations for the…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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3. An investment broker wants to invest up to $20,000. She can purchase type A bond yielding a 10% return and she can purchase a riskier type B bond yielding a 15% return. She wants to invest at least as much in the type A bond as in the type B bond to reduce her risk. The minimum investment for the type A bond is $5,000, and there are only $8,000 worth of type B bonds available. How much should the broker invest in each type of bond to maximize her returns?
Assume a company reported the following results: Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 400,000 260,000 140,000 40,000 100,000 Average operating assets $ 500,000 If the company's minimum required rate of return on average operating assets is 16%, its residual income would be: Multiple Choice О $20,000. $21,000. $22,000. $23,000.
On the basis of how long he has until retirement and his comfort with investment risk, Connor has decided that he wants to allocate the money in his retirement account as follows: 70% to equities, 15% to fixed income, and 15% to cash. If Connor assumes that each asset class provides the low end of the rates of return shown in the table below, what overall rate of return would he expect to earn over the long term? Asset Class Degree of Risk Historical Average Rate of Return Equities High 8% - 12% Fixed Income Moderate 4% - 7% Cash Minimal 2% - 5% Group of answer choices 4.34% 6.50% 1.43% 7.25%
3. Investments Nui invests $10,000, received from her grandmother, in three ways. With one part, she buys mutual funds that offer a return of 6.5% per year. She uses the second part, which amounts to twice the first, to buy government bonds at 6% per year. She puts the rest in the bank at 5% annual interest. The first year her investments bring a return of $605. How much did she invest in each way?
you have total portfolio $500,000 that is to be invested in certificates of deposit that pay simple annual interest of 2.5%, municipal bonds that pay simple annual interest of 10%, blue chip stocks that you expect to return 12% annually, cryptocurrency that you expected to return 18% annually. You want a combined annual return of 10% annually and you want one quarter of them invested in stocks and crypto. How much should be put in each type of investment
CGI Inc. is developing a new software platform, which requires an immediate investment of $780,000 and another $260,000 in three years. Net returns expected are $450,000 after two years, $313,000 after four years, and $889,000 after six years. However, if they simply upgrade their current platform, it requires an immediate investment of $400,000, another $260,000 after two years, and $340,000 after four years. Net returns are $187,500 per year for 8 years. The rate of interest is 6.9%. Which project is preferable according to the net present value / IRR criterion?
5

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