A Mutual Fund Manager Must Decide How Much Money to Invest

question 10

Multiple Choice

A mutual fund manager must decide how much money to invest in Atlantic Oil (A) and how much to invest in Pacific Oil (P) .At least 60% of the money invested in the two oil companies must be in Pacific Oil.A correct modeling of this constraint is

• A)0.4A + 0.6P > 0.
• B)-0.4A + 0.6P > 0.
• C)0.6A + 0.4P > 0.
• D)-0.6A + 0.4P > 0.

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Definitions:

Deductibility

The ability of a particular expense to be subtracted from gross income, thereby reducing taxable income.

For AGI Deduction

Deductions that are subtracted from gross income to arrive at adjusted gross income, potentially lowering taxable income.

Health Insurance Premiums

The amount paid periodically to a health insurer for coverage of medical expenses.

Early Withdrawal Penalty

A fee charged for withdrawing funds from an investment or retirement account before a specified age or period.