Finance Suppose the BlackRock Equity Dividend Fund sells at $24 a share and has ...

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Finance Suppose the BlackRock Equity Dividend Fund sells at $24 a share and has
a 3-year average annual return of $3 per share. The risk measure of beta is .95.
The Columbia Dividend Income Fund sells for $20 a share and has a 3-year
average annual return of $2 a share. The risk measure of beta is .89. Donald
wants to spend no more than $10,000 investing in these two funds, but he wants
to obtain at least $1100 in annual revenue. Donald also wants to minimize his
risk. Determine how many shares of each fund Donald should buy.
a.
Donald should buy 417 shares of the Blackrock Equity Dividend Fund and no shares of the Columbia Dividend Income Fund.
b.
Donald should buy 367 shares of the Blackrock Equity Dividend Fund and no shares of the Columbia Dividend Income Fund.
c.
Donald should buy 167 shares of the Blackrock Equity Dividend Fund and 300 shares of the Columbia Dividend Income Fund.
d.
Donald should buy no shares of the Blackrock Equity Dividend Fund and 500 shares of the Columbia Dividend Income Fund.
e.
Donald should buy no shares of the Blackrock Equity Dividend Fund and 550 shares of the Columbia Dividend Income Fund.
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