Use the Table Below to Answer the Following Question(s) The Company Recommends That No More Than $300,000 Be Invested

question 25

Multiple Choice

Use the table below to answer the following question(s) .
Qualis Investments is a private limited business that manages personal financial portfolios.The company manages six mutual funds and has a client that has acquired $750,000 from an inheritance.Characteristics of the funds are given in the table below.
$$\begin{array} { | c | c | c | c | } \hline & \text { Qualis Mutual Fund Data } & & \\\hline & & \begin{array} { c } \text { Expected Annual } \\\text { Return }\end{array} & \text { Risk Measure } \\\hline 1 & \text { Qualis Low-priced Stock Fund } & 7.23 \% & 11.87 \\\hline 2 & \text { Qualis Multinational Fund } & 8.42 \% & 12.62 \\\hline 3 & \text { Qualis Mid-cap Stock Fund } & 6.66 \% & 13.72 \\\hline 4 & \text { Qualis Mortgage Fund } & 2.72 \% & 3.37 \\\hline 5 & \text { Qualis Income Equity Fund } & 8.89 \% & 8.4 \\\hline 6 & \text { Qualis Balanced Fund } & 3.50 \% & 6.91 \\\hline\end{array}$$
The company recommends that no more than $300,000 be invested in any individual fund, and that at least $80,000 be invested in each of the mid-cap stock and mortgage fund.The total amount invested in the low-priced and multinational funds are at least 35% of the total investment.The client would like an average return of at least 6%.Assume that through represents the dollar amount invested in funds 1 through 6, respectively.
-Which of the following is the constraint for investment in low-priced and multinational funds?

• A)X₁ + X₂ ≥ 0.35(750,000)
• B) \(\frac{X_{1}+X_{2}}{750,000}\)
• ≥ 0.35(750,000)
• C)X₁ + X₂ + X₃ + X₄ + X₅ + X₆ ≥ 0.35(750,000)
• D) \(\frac{X_{1}+X_{2}}{750,000}\)≥ 0.35

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Definitions:

Price Variance

The difference between the expected cost of an item and its actual cost, often analyzed in budgeting and cost management.

Standard Price

A predetermined cost that serves as a benchmark for evaluating actual cost performance in purchasing or production.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services.

Manufacturing Cost Variance

The difference between the actual costs of production and the standard or expected costs, indicating efficiency or inefficiency in the manufacturing process.