Type of Loan/Investment Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities Annual Rate of Return (%) 9 11 x x x 12 What is the projected total annual return? $514800 13 The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the compos . Risk-free securities may not exceed 30% of the total funds available for investment. . Signature loans may not exceed 10% of the funds invested in a loans (automobile, furniture, other secured, and signature loans). 10 • Furniture loans plus other secured loans may not exceed the automobile loans. . Other secured loans plus signature loans may not exceed the furids invested in risk-free securities. How should the $2,200,000 be allocated to each of the loan/investment alternatives to maximize total annual return? Automobile loans $22 Furniture loans $1540000 Other secured loans $440000 Signature loans $220000 Risk-free securities $660000

Type of Loan/Investment Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities Annual Rate of Return (%) 9 11 x x x 12 What is the projected total annual return? $514800 13 The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the compos . Risk-free securities may not exceed 30% of the total funds available for investment. . Signature loans may not exceed 10% of the funds invested in a loans (automobile, furniture, other secured, and signature loans). 10 • Furniture loans plus other secured loans may not exceed the automobile loans. . Other secured loans plus signature loans may not exceed the furids invested in risk-free securities. How should the $2,200,000 be allocated to each of the loan/investment alternatives to maximize total annual return? Automobile loans $22 Furniture loans $1540000 Other secured loans $440000 Signature loans $220000 Risk-free securities $660000

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

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Question

Type of Loan/Investment
Automobile loans
Furniture loans
Other secured loans
Signature loans
Risk-free securities
$1540000
$440000
$ 220000
$ 660000
Annual Rate of Return (%)
xxx>
9
What is the projected total annual return?
$514800
11.
The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition
. Risk-free securities may not exceed 30% of the total funds available for investment.
• Signature loans may not exceed 10% of the funds invested in an loans (automobile, furniture, other secured, and signature loans).
. Furniture loans plus other secured loans may not exceed the automobile loans.
Other secured loans plus signature loans may not exceed the furids invested in risk-free securities.
12
How should the $2,200,000 be allocated to each of the loan/investment alternatives to maximize total annual return?
Automobile loans
$ 22
Furniture loans
Other secured loans
Signature loans
Risk-free securities
10

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