Question

In: Statistics and Probability

A bank is attempting to determine where its assets should be invested during the current year....

A bank is attempting to determine where its assets should be invested during the current year. At present, $400,000 is available for investment in bonds, home loans, auto loans, and personal loans. The annual rates of return on each type of investment are known to be the following: bonds, 10%; home loans, 16%; auto loans, 13%; personal loans, 20%. To ensure that the bank's portfolio is not too risky, the bank's investment manager has placed the following two restrictions on the bank's portfolio:

The amount invested in personal loans cannot exceed the amount invested in bonds.

he amount invested in home loans cannot exceed the amount invested in auto loans.

Find:

a) Bond loans

b) home loans

c) auto loans

d) personal loans

e) the one year return

f) three years return (not compounded)

Solutions

Expert Solution

bond Home auto personal
200000 0 0 200000

e)

60000

f)

60000* 3 = 180000

Please revert back in case of any doubt.

Please upvote. Thanks in advance.

orchestra answered 2 years ago
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