The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 12% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. It is also decided that no more than 30% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to Maximize the objective value. The optimal ROI occurs when: $ invested in Treasury notes = (enter your response as a whole number).

The Rio Credit Union has $250,000 available to invest in a 12-month commitment and wants to invest all of it. The money can be placed in Brazilian treasury notes yielding an 12% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. It is also decided that no more than 30% of the investment be placed in bonds. The aim of the objective function for Rio Credit Union should be to Maximize the objective value. The optimal ROI occurs when: $ invested in Treasury notes = (enter your response as a whole number).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 3P

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