You have $100,000 to invest over three types of investmentvehicles: bonds, a stock index fund,...

You have $100,000 to invest over three types of investment vehicles: bonds, a stock index fund, and gold. The current bond yield is 3%, the index fund is projecting a 12% return, and gold is projecting an 8% return. To play it safe, you want to keep no more than $30,000 in the index fund and at least four times as much in bonds as in gold. If the projected returns are accurate, how much should you allocate to each investment vehicle in order to maximize your return? Please answer this using excel solver.

Expert Solution

Follow below steps to compute allocation to each investment in order to maximise return using excel solver.

1. Setup table as shown below ( allocate any amount to investments but Total sum must be equal to $100,000)

Cell reference -

2. Go to Data---Solver, set solver parameters as shown below and then click on solve to get answer.

3. Answer

jeff jeffy answered 2 years ago

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