# Suppose that you inherit​\$10 comma 00010,000.The will states how you must invest the money. Some​ (or all) of the money must be invested in stocks and bonds. The requirements are that at least​\$30003000be invested in​ bonds, with expected returns of​\$0.140.14per​ dollar, and at least​\$20002000be invested in​ stocks, with expected returns of​\$0.190.19per dollar. Because the stocks are medium​ risk, the final stipulation requires that the investment in bonds should never be less than the investment in stocks. How should the money be invested so as to maximize your expected​ returns?To maximize the expected​ returns, invest​\$60006000in bonds and​\$60006000in stocks.

Question
Suppose that you inherit
​\$10 comma 00010,000.
The will states how you must invest the money. Some​ (or all) of the money must be invested in stocks and bonds. The requirements are that at least
​\$30003000
be invested in​ bonds, with expected returns of
​\$0.140.14
per​ dollar, and at least
​\$20002000
be invested in​ stocks, with expected returns of
​\$0.190.19
per dollar. Because the stocks are medium​ risk, the final stipulation requires that the investment in bonds should never be less than the investment in stocks. How should the money be invested so as to maximize your expected​ returns?
To maximize the expected​ returns, invest
​\$60006000
in bonds and
​\$60006000
in stocks.
Step 1

Note: Here we have considered that “\$10 comma 00010,000 , \$30003000, \$0.140.14, ​\$20002000, ​\$0.190.19” are repeated twice.

Suppose that you inherit \$10000. The will states that you  must invest the money (some or all) in stocks and bonds. The requirements are at least \$3000 in bond and \$2000 in stocks with expected returns of \$0.14 per dollar and \$0.19 per dollar respectively.

Since, the stocks are medium​ risk, the final stipulation requires that the investment in bonds should never be less than the investment in stocks.

Step 2

Let x be the amount invested in bond and y be the amount invested in stocks.

So, the expected returns, ER = 0.14x + 0.19y.

Step 3

If we draw the above inequa...

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