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The optimal ROI occurs when:

The optimal ROI occurs when:

Essentials Of Investments
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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The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 10% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. It is also decided that no more than 40% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to Maximize the objective value. The optimal ROI occurs when: $ invested in Treasury notes = (enter your response as a whole number).
Transcribed Image Text:The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 10% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. It is also decided that no more than 40% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to Maximize the objective value. The optimal ROI occurs when: $ invested in Treasury notes = (enter your response as a whole number).
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