The Shadow Price of Nonbinding Constraints

question 20

Multiple Choice

The shadow price of nonbinding constraints

• A)will always be zero.
• B)will always be a positive value.
• C)can never be equal to zero.
• D)is no longer valid if the right-hand side of the constraint remains the same.

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Definitions:

Invested Assets

Assets consisting of money or other items of value that are put into financial instruments or projects with the expectation of achieving income or profit.

Return On Investment

A performance measure used to evaluate the efficiency of an investment by comparing the amount of return relative to the investment’s cost.

Sales To Investment

A ratio that measures the return on investment by comparing the sales generated to the amount of investment made.

Investment Turnover

A measure of the activity or liquidity of an investment portfolio, indicating how frequently assets within the portfolio are bought and sold.