Portfolio OptimizationQuantitative Finance Level 2
You have $100,000 to invest in bonds, and you have selected three types of bonds: federal bonds paying 5% interest, municipal bonds paying 6%, and a corporate bonds paying 9%. No more that $20,000 can be invested in corporate bonds, and the amount of corporate bonds cannot exceed the amount of federal bonds. How much should be invested in municipal bonds to maximize the interest?
Answer is in units of dollars.