An investment advisor currently has two types of investments available for clients: a conservative investment A that pays 8% per year and investment B of higher risk that pays 14%. Clients may divide their investments between the two to achieve any total return desired between 8% and 14%. However, the higher the desired return, the higher the risk. How should each client listed in the table invest to achieve the desired return? Client 1 Client 2 Client 3 k Total Investment $21000 540000 531000 k, Annual Return Desired $2460 $3860 $3740 k2 How much money should Client 1 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 2 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 3 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B:
An investment advisor currently has two types of investments available for clients: a conservative investment A that pays 8% per year and investment B of higher risk that pays 14%. Clients may divide their investments between the two to achieve any total return desired between 8% and 14%. However, the higher the desired return, the higher the risk. How should each client listed in the table invest to achieve the desired return? Client 1 Client 2 Client 3 k Total Investment $21000 540000 531000 k, Annual Return Desired $2460 $3860 $3740 k2 How much money should Client 1 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 2 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 3 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...
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Transcribed Image Text:An investment advisor currently has two types of investments available for clients: a conservative investment A that pays 8% per year and investment B of higher
risk that pays 14%. Clients may divide their investments between the two to achieve any total return desired between 8% and 14%. However, the higher the desired return,
the higher the risk. How should each client listed in the table invest to achieve the desired return?
Client 1 Client 2 Client 3 k
$21000 $40000 $31000 k,
Annual Return Desired $2460 $3860 $3740 k2
Total Investment
How much money should Client 1 invest in each account to achieved the desired return?
Amount in investment A:
Amount in investment B:
How much money should Client 2 invest in each account to achieved the desired return?
Amount in investment A:
Amount in investment B:
How much money should Client 3 invest in each account to achieved the desired return?
Amount in investment A:
Amount in investment B:
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