Question

A young couple has \(25,000 to invest. As their financial consultant, you recommend that they invest some money in Treasury bills that yield 7%, some money in corporate bonds that yield 9%, and some money in junk bonds that yield 11%. Prepare a table showing the various ways that this couple can achieve the following goals:

(a) \)1500 per year in income

(b) \(2000 per year in income

(c) \)2500 per year in income

(d) What advice would you give this couple regarding the income that they require and the choices available?

Short answer

Step-by-step solution