Exposure to any one type of investment

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Reference no: EM13967928

ITC is an Investment company that has $5 million to invest. For this particular investment, the company has six fund potions available to invest in. The table below provides the expected return for each of the investment as well as a proprietary risk score (lower number=less risk) which measures how risky each investment is , while the company wants to earn maximum return it can for its investors , it also has an obligation to diversify its investment selections in order to reduce its risk exposure to any one type of investment. to meet the diversification reuirements the company must satisfy the following criteria.

Investment	interest earned	risk score
Trade Credits	7%	1.7
Corporate bonds	10%	1.2
Gold Stocks	19%	3.7
Platinum Stocks	12%	2.4
Mortgage Securities	8%	2.0
Construction Loans	14%2.9

Reference no: EM13967928

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