Young MBA Erica Cudahy can invest up to $20,000in stocks and loans. Each dollar invested in stocksyields $0.08 profit, and each dollar invested in a loanyields $0.13 profit. At least 40% of all money investedmust be in stocks, and at least $7000 must be in loans.Determine how Erica can maximize the profit earnedon her investments.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter17: Financial Markets
Section: Chapter Questions
Problem 5SCQ: Investors sometimes fear that a high-risk investment is especially likely to have low returns. Is...
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Young MBA Erica Cudahy can invest up to $20,000
in stocks and loans. Each dollar invested in stocks
yields $0.08 profit, and each dollar invested in a loan
yields $0.13 profit. At least 40% of all money invested
must be in stocks, and at least $7000 must be in loans.
Determine how Erica can maximize the profit earned
on her investments.

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