Chapter 4.CRE, Problem 22CRE

INVESTMENT ANALYSIS Jorge has decided to invest at most $\$100,000$ in securities in the form of corporate stocks. He has classified his options into three groups of stocks: blue chip stocks that he assumes will yield a $10\%$ return (dividends and capital appreciation) within a year, growth stocks that he assumes will yield a $15\%$ return within a year, and speculative stocks that he assumes will yield a 20% return (mainly due to capital appreciation) within a year. Because of the relative risks involved in his investment, Jorge has further decided that no more than $30\%$ of his investment should be in growth and speculative stocks and at least $50\%$ of his investment should be in blue-chip and speculative stocks. Determine how much Jorge should invest in each group of stocks in the hope of maximizing the return on his investments. What is the maximum return?