An investor has $600,000 to invest in two types of investments. Type A pays 7% annually and type B pays 9% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment? I am assuming then it is the same scenario so my choices would either be:
a.$200,000 in type A (7%), $400,000 in type B (9%)
b.$210,000 in type A (7%), $390,000 in

Question

An investor has $600,000 to invest in two types of investments. Type A pays 7% annually and type B pays 9% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment? I am assuming then it is the same scenario so my choices would either be: 
a.$200,000 in type A (7%), $400,000 in type B (9%) 
b.$210,000 in type A (7%), $390,000 in

anonymous · Answer

They both pay out annually, so go with the highest percentage-yielding investment for all but the required $200k that has to be in the lower.

anonymous · Answer

Ok so a in this case....
WOuld it be the same for this:

An investor has $300,000 to invest in two types of investments. Type A pays 4% annually and type B pays 6% annually.

anonymous · Answer

$100,000 in type A (4%), $200,000 in type B (6%)

anonymous · Answer

?

anonymous · Answer

Well, it seems like too easy of a question to ask.  That has me worried.  Are you sure there are no other details that you didn't share?

anonymous · Answer

An investor has $300,000 to invest in two types of investments. Type A pays 4% annually and type B pays 6% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment?

anonymous · Answer

Same as the above question just different numbers and percentages

anonymous · Answer

If those are all of the details to be had, then a higher percentage yield will always give you more money if they pay out over the same period.  I'm not sure why you are being asked this question more than once.

anonymous · Answer

I don't either... I thought I'd ask cause I thought maybe it was a trick question, but thank you!

anonymous · Answer

You're welcome.  I'm actually worried about that too hence me asking if those were all of the details.  lol

anonymous · Answer

Panther? Could you help me as well?

anonymous · Answer

Well it looks like I got it right, but thanks:)