The Objective Function Formulation for a Goal Programming Model Is

question 102

Short Answer

The objective function formulation for a goal programming model is as follows:
Min P₁ d₁ -, P₂ d₂ -, P₃ d₁ +, P₄ d₃ -
Which one of the variables would the program designers like to have as the second goal such that its deviation from zero is minimized?

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Definitions:

Default Risk Premiums

The additional yield that investors require to hold debt that has a risk of default over a risk-free debt instrument.

Yield

Yield is the earnings generated and realized on an investment over a particular period of time, expressed as a percentage of the investment’s cost or current market value.

Treasury Bond

A long-term government bond with a maturity of more than 10 years used to fund federal expenditures.

Default Risk Premiums

The extra yield that an investor demands to compensate for the risk that the issuer of a bond may default on payment.