An Investor Has $750,000 to Invest in Two Types of Investments

Multiple Choice

An investor has $750,000 to invest in two types of investments. Type A pays 4% annually and type B pays 5% annually. To have a well-balanced portfolio, the investor imposes the following conditions. At least one-third of the total portfolio is to be allocated to type A investments and at least one-third of the portfolio is to be allocated to type B investments. What is the optimal amount that should be invested in each investment?

A) $250,000 in type A (4%) , $500,000 in type B (5%)
B) $0 in type A (4%) , $750,000 in type B (5%)
C) $500,000 in type A (4%) , $250,000 in type B (5%)
D) $750,000 in type A (4%) , $0 in type B (5%)
E) $260,000 in type A (4%) , $490,000 in type B (5%)