Exhibit 7.3 The Following Questions Are Based on the Problem Below

question 60

Multiple Choice

Exhibit 7.3
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 minimax formulation of the problem has been solved in Excel.
-Refer to Exhibit 7.3. What formula goes in cell E11?

• A) =D11*(C11−B11)/C11
• B) =(C11−B11)/C11
• C) =D11*C11
• D) =D11*(C11−B11)

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