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:

Low-Wage Jobs

Positions that offer compensation at the lower end of the pay scale, often not sufficient to meet the basic living expenses of the worker.

Free Black Workers

Denotes African American individuals who were not enslaved and worked for wages or owned their businesses, notably before and after the Civil War in the United States.

Fugitive Slave Act

Legislation passed in 1850 that required the return of escaped slaves to their owners and imposed penalties on anyone who aided in their flight, intensifying antislavery sentiments.

Escaped Slaves

Individuals who fled from slavery to seek freedom, often traveling long distances and facing significant dangers.