The Constraints X₁ $\ge$ 0 and X₂ $\ge$ 0 Are Referred to as
A)positivity Constraints

question 61

Multiple Choice

The constraints X₁ $\ge$ 0 and X₂ $\ge$ 0 are referred to as

• A)positivity constraints.
• B)optimality conditions.
• C)left hand sides.
• D)nonnegativity conditions.

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Definitions:

Stable Equilibrium

A state in which a system, once disturbed, returns to its original condition because the equilibrium is stable.

Expected and Required Returns

The returns that investors anticipate or demand from an investment considering its risk, often guiding investment decisions.

SML

Stands for Security Market Line; it represents the relationship between the expected return of an investment and its risk in the capital asset pricing model (CAPM).

Beta of the Portfolio

An assessment of a portfolio's volatility or inherent risk, relative to the overall market.