Exhibit 7.3 The Following Questions Are Based on the Problem Below

question 31

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. Which value should the investor change, and in what direction, if he wants to reduce the risk of the portfolio?

• A) D11, increase
• B) D12, increase
• C) C12, increase
• D) D12, decrease

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Definitions:

Collective Unconscious

A concept proposed by Carl Jung referring to the part of the unconscious mind that is derived from ancestral memory and experience, shared among all humans.

Controversial Aspect

A facet or element of a subject, issue, or topic that leads to disagreements, differing opinions, or debates.

Personal Unconscious

A term denoting Carl Jung's concept of a layer of the unconscious mind that consists of forgotten or suppressed experiences unique to the individual.

Functions Of Psyche

The functions of the psyche refer to the roles and operations of the mind in processing thoughts, emotions, and behaviors.