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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Question
![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 5%, and on B bonds 8%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each
ype of bond if the total investment is $9,000, and the investor wants an annual return of $470 on the three investments?
The client should invest $ in AAA bonds, $in A bonds, and $[ in B bonds.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F13f0a062-3a0a-4fc9-b014-a3035797aa2d%2Fc845c2a8-918a-4b30-bcd8-304655369bf7%2F0q10dq_processed.png&w=3840&q=75)
Transcribed Image Text: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 5%, and on B bonds 8%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each
ype of bond if the total investment is $9,000, and the investor wants an annual return of $470 on the three investments?
The client should invest $ in AAA bonds, $in A bonds, and $[ in B bonds.
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