S. ASSET ALL0CATION A financier plans to invest up to $500,000 in two projects. Project A yields a return of 10% on the investment, whereas Project B yields a return of 15% on the investment. Because the investment in Project B is riskier than the investment in Project A, the financier has decided that the investment in Project B should not exceed 40% of the total investment. How much should she invest in each project to maximize the return on her investment?

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Author:Erwin Kreyszig
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S. ASSET ALL0CATION A financier plans to invest up to
$500,000 in two projects. Project A yields a return of 10%
on the investment, whereas Project B yields a return
of 15% on the investment. Because the investment in
Project B is riskier than the investment in Project A, the
financier has decided that the investment in Project B
should not exceed 40% of the total investment. How
much should she invest in each project to maximize the
return on her investment?
Transcribed Image Text:S. ASSET ALL0CATION A financier plans to invest up to $500,000 in two projects. Project A yields a return of 10% on the investment, whereas Project B yields a return of 15% on the investment. Because the investment in Project B is riskier than the investment in Project A, the financier has decided that the investment in Project B should not exceed 40% of the total investment. How much should she invest in each project to maximize the return on her investment?
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