Non-Negativity Constraints

question 36

Multiple Choice

Non-negativity constraints

• A) require the use of greater-than-or-equal-to constraints.
• B) restrict the decision variables to positive values.
• C) restrict the decision variables to negative values.
• D) do not restrict the sign of the decision variable.

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Definitions:

Quality Ratings

Assessments of the creditworthiness or quality of corporations and government bonds, often provided by credit rating agencies.

Required Rates

The minimum returns demanded by investors or lenders to compensate for the risk of an investment or loan.

Bonds

Bonds are debt securities issued by corporations or governments to raise funds, where the bond issuer agrees to pay back the principal along with interest.

Zero Coupon Issue

A bond or debt security that doesn’t pay periodic interest but is traded at a discount, realizing gains at maturity.