What Is the Soft Constraint Form of the Following Hard $\le$

question 62

Multiple Choice

What is the soft constraint form of the following hard constraint?
3X₁ + 2 X₂ $\le$ 10

• A)3X₁ + 2 X₂ + d₁^- - d₁⁺ = 10
• B)3X₁ + 2 X₂ + d₁^- + d₁⁺ = 10
• C)3X₁ + 2 X₂ -d₁^- - d₁⁺ \(\le\) 10
• D)3X₁ + 2 X₂ + d₁^- - d₁⁺ \(\ge\) 10

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Definitions:

Strike Price

The price at which the holder of an option can buy (in a call option) or sell (in a put option) the underlying security.

Intrinsic Value

The actual value of a company or an asset based on underlying perception of its true value including all aspects of the business.

November 45 Call

A call option that gives the holder the right to buy a particular stock at a price of $45 per share, expiring in November.

Pure Discount Bond

A type of bond that is issued at a discount to its nominal value and pays no interest, but is redeemed at its face value at maturity.