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

question 18

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 investor stipulates that stock 1 must not account for more than 35% of the number of shares purchased. Which constraint is correct?

• A) X1 ? 0.35
• B) X1 = 0.35 (50000)
• C) X1 ? 0.35(X1 + X2 + X3)
• D) X1 = 0.35(X1 + X2 + X3)

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Definitions:

Last-in First-out (LIFO)

Last-in First-out (LIFO) is an inventory valuation method where the most recently produced or acquired items are sold first, leading to older stock being recorded in inventory.

Development Costs

Development costs are the expenses associated with the research and development of new products or services, aiming to improve or create new offerings.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales, calculated by dividing sales by total assets.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales with total assets.