Answer to Question #281274 in Operations Research for Benson

Question

You have $1200 to invest, and three 

different funds from which to choose. The municipal bond has a 7% return, the local bank CDs have an 8% return and the high risk account has an expected 12% return. To minimize risk you decide not to invest any more than $2000 in the high risk account. For tax reasons you need to invest at least 3 times as much as in the bank CDS. Assuming the year-end yield is are expected, what are the optimal investment amounts?