In a BIP Problem with 3 Mutually Exclusive Alternatives,x₁ ,X₂

question 16

Multiple Choice

In a BIP problem with 3 mutually exclusive alternatives,x₁ ,x₂ ,and x₃,the following constraint needs to be added to the formulation:

• A)x₁ + x₂ +x₃ ≤ 1
• B)x₁ + x₂ +x₃ = 1
• C)x₁ - x₂ -x₃ ≤ 1
• D)x₁ - x₂ -x₃ = 1
• E)None of the above

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Definitions:

Fair-Value Hedge

A hedge of the exposure to changes in fair value of an asset or liability or an identified portion of such an asset or liability that is attributable to a particular risk.

Exchange Gain

A profit arising from changes in foreign exchange rates that benefit the value of a company's foreign currency denominated assets or liabilities.

April 30 Year-End

A fiscal year or financial reporting period that concludes on April 30th, often used by companies or organizations for tax or reporting purposes.

Cash-Flow Hedge

A financial strategy used to manage risks associated with the fluctuations in cash flows due to changes in exchange rates, interest rates, or commodity prices.