25000 in mutual funds
50000 in CD
Pool of money managed by a professional Fund Manager is termed mutual fund. It is a trust that collects money from other investors who have a common investment objective and invests the same in equities and bonds.
Let X be the amount in Mutual Funds
Y be the amount in CDs
the constraints:
Y = 2x
x>9000
Y = 75000 - x
There has to be at least 2x + x = 75000
3x = 75000
x = 25000
Objective function for the return of investment is R(x,y) = 0.06X + 0.07Y
After graphing linear equations and inequalities, the vertices of the critical region are as:
(9000,18000) --> 1710
(25000,50000) ---> 4750
(75000,0) --> 3750
25000 in mutual funds
50000 in CD
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