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

question 52

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 2 variance?

• A)0.00236
• B)-0.00031
• C)0.00080
• D)0.00430

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Definitions:

Mucosal Membrane

Moist tissue layer lining body cavities or passages that are open to the exterior, such as the mouth, nose, and intestines.

Upper Epithelial Cells

The cells that are located on the surface layer of an epithelium, acting as a barrier against physical and microbial threats.

Endocrine Gland

A gland in the body that releases hormones directly into the bloodstream to regulate various processes such as growth, metabolism, and mood.

Bloodstream

The flowing body fluid that circulates through the heart, arteries, capillaries, and veins, carrying oxygen, nutrients, and white blood cells throughout the body.