In a Portfolio Problem, X1, X2, and X3 Represent the Number

question 40

Multiple Choice

In a portfolio problem, X1, X2, and X3 represent the number of shares purchased of stocks 1, 2, and 3, which have selling prices of $15, $47.25, and $110, respectively. The investor has up to $50,000 to invest.
-The stockbroker suggests limiting the investments so that no more than $10,000 is invested in stock 2 or the total number of shares of stocks 2 and 3 does not exceed 350, whichever is more restrictive. How would this be formulated as a linear programming constraint?

• A)
• \(\begin{array} { l }
• X _ { 2 } \leq 10000 \\
• X _ { 2 } + X _ { 3 } \leq 350
• \end{array}\)
• B) 10,000 X2 ? 350X2 + 350X3
• C)
• \(\begin{array} { l }
• 47.25 \mathrm { X } _ { 2 } \leq 10,000 \\
• \mathrm { X } _ { 2 } + \mathrm { X } _ { 3 } \leq 350
• \end{array}\)
• D)
• \(\begin{array} { l }
• 47.25 \mathrm { X } _ { 2 } \leq 10,000 \\
• 47.25 \mathrm { X } _ { 2 } + 110 \mathrm { X } _ { 3 } \leq 350
• \end{array}\)

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Definitions:

Utility Function

A mathematical representation in economics of how a consumer's preferences correspond to the consumption of goods and services.

Endowed

Possessing a particular resource, asset, or attribute, either naturally or through a transfer, such as being given a sum of money or property.

Bromides

Compounds containing a bromine ion or a derivative thereof; in colloquial usage, a bromide is a commonplace or boring statement intended to placate or pacify.

Platitudes

Often overused statements or remarks that are intended to convey moral or practical truths, but are perceived as lacking in originality or sincerity.