Use the Information Below to Answer the Following Questions

question 30

Multiple Choice

Use the information below to answer the following questions.
Consider the following maximal flow problem where node 1 is the source and node 6 is the destination.

-Refer to the figure.What is the maximum capacity associated with arc X₆₁?

• A)+1
• B)-1
• C)0
• D)+∞
• E)-∞

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Definitions:

Risk-Free Rate

The interest rate that can be earned with certainty, commonly taken to be the rate on short-term Treasury bills.

Security Market Line

A graphical representation that shows the relationship between the expected return of an investment and its risk as measured by beta.

Expected Rate

The anticipated rate of return on an investment, factoring in known variables and risk assessments.

Capital Market Line

A line in the risk-return space representing the risk-return combination available to investors from a risk-free asset and market portfolio of risky assets.