Exhibit 7.2 The Following Questions Are Based on the Problem Below

question 64

Multiple Choice

Exhibit 7.2
The following questions are based on the problem below.
An investor has $150,000 to invest in investments A and B. Investment A requires a $10,000 minimum investment, pays a return of 12% and has a risk factor of .50. Investment B requires a $15,000 minimum investment, pays a return of 10% and has a risk factor of .20. The investor wants to maximize the return while minimizing the risk of the portfolio. The following multi-objective linear programming (MOLP) has been solved in Excel.
-Refer to Exhibit 7.2. What Analytic Solver Platform constraint involves cells $B$6:$C$6?

• A) $B$6:$C$6=$B$7:$C$7
• B) $B$6:$C$6≥$B$7:$C$7
• C) $B$6:$C$6≤$B$7:$C$7
• D) $B$6:$C$6=$D$7

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Definitions:

Market Imperfections

Occur when conditions for perfect market competition are not met, leading to inefficiencies such as monopolies or information asymmetries.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout, to shareholders.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Dividend Cuts

A reduction in the dividend payments issued by a company, which can signify financial distress or a reallocation of funds.