A Rectangle Has Its Two Bottom Corners Lying on the X-Axis

question 39

Multiple Choice

A rectangle has its two bottom corners lying on the x-axis and the two top corners on the parabola , where . If the area of the rectangle is to be maximized, then what are its dimensions?

• A) 1 3
• B) 2 2
• C) 4 5
• D) 1 2

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Definitions:

Efficient Frontier

A concept in modern portfolio theory representing the set of portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Risk Tolerance

The level of fluctuation in the returns on investments that an investor can tolerate.

Risk Aversion

A characteristic or trait describing investors who prefer lower returns with known risks rather than higher returns with unknown risks.

Time Horizons

The length of time over which an investment is expected to be held or a project is expected to be completed.