A Credit Union Wants to Make Investments in the Following

question 90

Essay

A credit union wants to make investments in the following:
$$\begin{array} { l c } \text { Type of Investment } & \begin{array} { c } \text { Annual Rate } \\\text { of Return (\%) }\end{array} \\\hline \text { Vehicle loans } & 7 \\\text { Consumer loans } & 9 \\\text { Other secured loans } & 10 \\\text { Signature loans } & 11 \\\text { Risk-free securities } & 8 \\\hline\end{array}$$
The firm will have $2,500,000 available for investment during the coming year. The following restrictions apply:
∙ Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total.
∙ Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans)
∙ Consumer loans plus other secured loans may not exceed the vehicle loans
∙ Other secured loans plus signature loans may not exceed the funds invested in risk-free securities.
How should the $2,500,000 be allocated to each alternative to maximize annual return? What is the annual return?

Grasp the concept of goal orientation and its relevance to achievement settings.

Analyze the factors affecting price elasticity of demand including time, availability of substitutes, and proportion of income spent on a good.

Determine how changes in price affect total revenue under different elasticity conditions.

Recognize the difference in elasticity between short-run and long-run demand.

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Definitions:

Calories

A measure of energy provided by food and drink, used by the body for various functions and activities.

Salty Foods

Foods high in salt content, which can affect heart health and blood pressure.

Rough-and-Tumble Play

Physical play that involves boisterous activities, such as running, jumping, and play fighting, common in childhood.

Sociodramatic Play

A form of play among children where they enact roles and scenarios, mimicking real-life situations, fostering social and communication skills.