How much should the rio credit union invest

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Reference no: EM131257722

The Rio Credit Union has $250,000 available to invest in a 12-month commitment. The money can be placed in Brazilian treasury notes yielding an 8% return or in riskier high-yield bonds at an average rate of return of 9%. Credit union regulations require diversification to the extent that at least 50% of the investment be placed in Treasury notes.

It is also decided that no more than 40% of the investment be placed in bonds. How much should the Rio Credit Union invest in each security so as to maximize its return on investment?

Reference no: EM131257722

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