Question

The credit union will have $1.8 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: • Risk-free securities may not exceed 25% of the total funds available for investment. • Signature loans may not exceed 12% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). • Furniture loans plus other secured loans may not exceed the automobile loans. • Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $1.8 million be allocated to each of the loan/investment alternatives to maximize total annual return?

Answer 1

Answer:

Thus, the projected total annual return is $169,740.

The answer and procedures of the exercise are attached in the following archives.

Explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.