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

question 193

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 $16,300, and risk factors make it prudent to invest some money in all three investments. What is the maximum amount that will be invested at 7%, and in this case how much will be invested at the other rates? ​

• A)$220,000 at 7%, $0 at 8%, $0 at 10%
• B)$180,000 at 7%, $10,000 at 8%, $30,000 at 10%
• C)$190,000 at 7%, $0 at 8%, $30,000 at 10%
• D)$30,000 at 7%, $0 at 8%, $190,000 at 10%
• E)$190,000 at 7%, $20,000 at 8%, $10,000 at 10%

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Definitions:

Intangible Assets

Assets that do not have physical substance but are identifiable and provide future economic benefits, such as patents, trademarks, and copyrights.

Physical Substance

This refers to the tangible nature of an asset, meaning it can be seen, touched, or physically measured.

Acquisition Cost

The total cost associated with acquiring an asset, including purchase price, installation fees, and other expenses necessary to prepare the asset for its intended use.

Entire Business

Refers to the complete operations and assets of a company as a single entity.