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:

Gathering Ideas

The process of collecting diverse thoughts, suggestions, or concepts for consideration or future action.

Creativity Defined

refers to the ability to generate new and original ideas, approaches, or solutions, often characterized by innovation and imagination.

Transformed Into Value

The process of converting something into something of worth, especially in terms of business or financial benefits.

Generated

Created or produced, often in context to data, ideas, or outcomes as a result of a process or activity.