Mr. Jones should invest $ in low-risk stocks, $ in medium-risk stocks, and $ in high-risk stocks.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
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Mr. Jones has $11,000 to invest in three types of stocks, low-risk, medium-risk, and high-risk. He invests according to three principles. The amount invested in low-risk
stocks will be at most $1,000 more than the amount invested in medium-risk stocks. At least $7,000 will be invested in low- and medium-risk stocks. No more than
$9,000 will be invested in medium- and high-risk stocks. The expected yields are 6% for low-risk stocks, 7% for medium-risk stocks, and 8% for high-risk stocks. How
much money should Mr. Jones invest in each type of stock to maximize his total expected yield?
Mr. Jones should invest $ in low-risk stocks, $ in medium-risk stocks, and $ in high-risk stocks.
Transcribed Image Text:Mr. Jones has $11,000 to invest in three types of stocks, low-risk, medium-risk, and high-risk. He invests according to three principles. The amount invested in low-risk stocks will be at most $1,000 more than the amount invested in medium-risk stocks. At least $7,000 will be invested in low- and medium-risk stocks. No more than $9,000 will be invested in medium- and high-risk stocks. The expected yields are 6% for low-risk stocks, 7% for medium-risk stocks, and 8% for high-risk stocks. How much money should Mr. Jones invest in each type of stock to maximize his total expected yield? Mr. Jones should invest $ in low-risk stocks, $ in medium-risk stocks, and $ in high-risk stocks.
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