All of the Following Statements About a Redundant Constraint Are

question 18

Multiple Choice

All of the following statements about a redundant constraint are correct EXCEPT

• A) A redundant constraint does not affect the optimal solution.
• B) A redundant constraint does not affect the feasible region.
• C) Recognizing a redundant constraint is easy with the graphical solution method.
• D) At the optimal solution, a redundant constraint will have zero slack.

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Definitions:

Required Returns

The minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level.

Market Risk Premium

The difference between the expected return on a market portfolio and the risk-free rate.

Risk Aversion

The preference for lower risk options over higher risk ones, even if the latter could result in higher returns.

Security Market Line

A representation in finance that shows the expected return of investments at different levels of risk, based on the capital asset pricing model (CAPM).