The University's Employee Credit Union Has $4 Million Available for Loans

question 83

Multiple Choice

The University's employee credit union has $4 million available for loans in the coming year. As VP in charge of finances, you must decide how much capital to allocate to each of four different kinds of loans, as shown in the table. $$\begin{array} { | c | c | } \hline \text { Type of Loan } & \begin{array} { c } \text { Annual Rate of } \\\text { Return }\end{array} \\\hline \text { Automobile } & 8 \% \\\hline \text { Furniture } & 10 \% \\\hline \text { Signature } & 12 \% \\\hline \text { Other secured } & 10 \% \\\hline\end{array}$$ State laws and credit union policies impose the following restrictions:
Signature loans may not exceed 10 percent of the total investment of funds.
Furniture loans plus other secured loans may not exceed automobile loans.
How much should you allocate to each type of loan to maximize the annual return

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Definitions:

Class Analysis

An examination of societies based on the hierarchical categorization of individuals into classes, typically determined by wealth, occupation, and social status.

Functionalist Analysis

A sociological approach that interprets each part of society in terms of how it contributes to the stability of the whole society.

Stratification

The arrangement or classification of something into different groups, levels, or ranks, often used to describe social hierarchies.

Class Analysis

The examination of societal strata and its implications on individuals' lifestyles, opportunities, and social relationships, often focusing on inequalities.