A Trust Account Manager Has $220,000 to Be Invested

question 84

Multiple Choice

A trust account manager has $220,000 to be invested. The investment choices have current yields of 8%, 7%, and 10%. Suppose that the investment goal is to earn interest of $16,600, and risk factors make it prudent to invest some money in all three investments. If $30,000 is invested at 10%, how much will be invested at each of the other rates? ​

• A)$50,000 at 8%; $140,000 at 7%;
• B)$20,000 at 8%; $170,000 at 7%;
• C)$30,000 at 8%; $160,000 at 7%;
• D)$10,000 at 8%; $180,000 at 7%;
• E)$40,000 at 8%; $150,000 at 7%

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Definitions:

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations within a set of observed variables.

Reaction Tendencies

refers to habitual patterns of behavior, thought, or emotional response to particular situations or stimuli.

Structural Units

Basic components or building blocks that make up a structure, system, or complex entity.

Mental Elements

Fundamental components or aspects that make up the processes of the mind, such as thoughts, feelings, and attitudes.