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

question 17

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 cross-product value for Stock 1 variance?

• A)0.00176
• B)0.00450
• C)-0.00047
• D)0.00194

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Definitions:

Stratified Random Sample

A sampling method where the population is divided into subsets, known as strata, and a random sample is taken from each stratum.

Freshman

A student in their first year of study at a high school or university.

Sophomore

The term used to describe a second-year student in high school or college.

Junior

A term typically used to describe a third-year student in a four-year educational institution or someone with intermediate level experience in a job role.