How much should the national credit union invest in

Reference no: EM13615308

The National Credit Union has $250,000 available to invest in a12-month commitment. The money can be placed in Treasury notesyielding an 8% return or in municipal bonds at an average rate ofreturn of 7%. Credit union regulations require diversification tothe extent that at least 50% of the investment be placed inTreasury notes. Because of defaults in such municipalities asCleveland and New York, it is decided that no more than 40% of theinvestment be placed in bonds.

(a)How much should the National Credit Union invest in Treasury notesso as to maximize its return on investment?Round your answer to the nearest whole number; forexample, 123,456 .

(b)How much should the National Credit Union invest in municipal bondsso as to maximize its return on investment?Round your answer to the nearest whole number; forexample, 123,456 .

(c)What is the maximal return on investment?$Round your answer to the nearest whole number; forexample, 12,345 .

Reference no: EM13615308

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