erikloza12pdidtx
erikloza12pdidtx
22.03.2021 • 
Business

The management of a private investment club has a fund of $300,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that the management is considering have been classified into three categories: high-risk, medium-risk, and low-risk. Management estimates that high-risk stocks will have a rate of return of 16 percent per year; medium-risk stocks, 10 percent per year; and low-risk stocks, 4 percent per year. The investment in medium-risk stocks is to be twice the investment in stocks of the other two categories combined. If the investment goal is to have an average rate of return of 11 percent per year on the total investment, determine how much the club should invest in each type of stock.

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