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

question 2

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 is the squared term value for Stock 1 variance?

• A)0.00065
• B)0.00535
• C)0.01132
• D)0.00283

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Definitions:

External Stimuli

Elements in the environment that can elicit responses from our sensory organs, influencing behavior or reactions.

Cognitive Perspective

A psychological approach that focuses on how we think, perceive, and solve problems, emphasizing mental processes.

Culture Emphasizes

The prioritization of certain values, beliefs, and practices by a society or group that shapes its members' behavior and perceptions.

Inconsistencies

Discrepancies or lack of alignment in information, actions, or beliefs that may lead to confusion or misunderstanding.