Use the Table Below to Answer the Following Question(s)

question 21

Multiple Choice

Use the table below to answer the following question(s) .
Jonathan Reese is considering three stocks in which to invest with a fixed budget.The table below provides information on Jonathan's expected returns for each stock.The table also provides information, collected from market researchers, on the variance-covariance matrix of the individual stocks.He expects a total return of at least 10%.

Develop a quadratic optimization model to find the optimal allocation of the budget to each stock, and variance calculations for squared terms and cross-products based on the variance-covariance matrix.
-According to the model, what percentage of the budget should be allocated to Stock 3?

• A)40%
• B)20%
• C)25%
• D)75%

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Definitions:

Ways of Knowing

Various means by which human beings acquire knowledge, including sense perception, reason, emotion, faith, imagination, intuition, memory, and language.

Sensorimotor

Pertaining to the combined processes of sensory perception and motor action.

Preoperational

A stage in Jean Piaget's theory of cognitive development where children from ages 2 to 7 engage in symbolic play and struggle with logic and taking the perspective of others.

Nonstage Theories

Cognitive development theories that argue against the idea of distinct, universal stages of cognitive growth, suggesting instead that development is a more continuous and fluid process.