Ashley Has Earmarked at Most $270,000 for Investment in Three

question 134

Multiple Choice

Ashley has earmarked at most $270,000 for investment in three mutual funds: a money market fund, an international equity fund, and a growth-and-income fund. The money market fund has a rate of return of 6% per year, the international equity fund has a rate of return of 10% per year, and the growth-and-income fund has a rate of return of 16% per year. Ashley has stipulated that no more than 25% of her total portfolio should be in the growth-and-income fund and that no more than 50% of her total portfolio should be in the international equity fund. To maximize the return on her investment, how much should Ashley invest in each type of fund?

• A) Minimize P = 0.06x + 0.1y + 0.16z subject to x + y + z ≤ 270,000, y ≤ 135,000, z ≤ 67,5000, x ≥ 0, y ≥ 0, z ≥ 0
• B) Maximize P = 0.06x + 0.1y + 0.16z subject to x + y + z ≤ 135,000, y ≤ 67,500, z ≤ 67,5000, x ≥ 0, y ≥ 0, z ≥ 0
• C) Minimize P = 0.06x + 0.1y + 0.16z subject to x + y + z < 270,000, y < 135,000, z < 67,5000, x > 0, y > 0, z > 0
• D) Maximize P = 0.06x + 0.1y + 0.16z subject to x + y + z < 270,000, y < 135,000, z < 67,5000, x > 0, y > 0, z > 0
• E) Maximize P = 0.06x + 0.1y + 0.16z subject to x + y + z ≤ 270,000, y ≤ 135,000, z ≤ 67,5000, x ≥ 0, y ≥ 0, z ≥ 0

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Definitions:

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A logical error in reasoning where conclusions about individual-level behaviors or attributes are derived from group-level data.

Exception Fallacy

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