Investment. An investor has $150,000 to invest in oil stock, steel stock, and government bonds. The bonds are guaranteed to yield 5%, but the yield for each stock can vary. To protect against major losses, the investor decides that the amount invested in oil stock should not exceed $50,000 and that the total amount invested in stock cannot exceed the amount invested in bonds by more than $25,000.
(A) If the oil stock yields 12% and the steel stock yields 9%, how much money should be invested in each alternative in order to maximize the return? What is the maximum return?
(B) Repeat part (A) if the oil stock yields 9% and the steel stock yields 12%.
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