Question

In a Portfolio Selection problem, let X1, X2 and 3 represent the number of shares purchased for stocks 1, 2 and 3, which have selling prices of $45, $15 and $100 respectively. The returns on investment for stocks 1, 2 and 3 are 10%, 8%, and 13% of the amount of money invested respectively. The investor has up to $40,000 to invest. One appropriate constraint would be: Select one: O a. 45x1 + 15x2 + 100x3 s 40,000; O b. 15X1 + 45x2 + 100x3 s 40,000; O C. X1 + X2 + x3 = 40,000; O d. (.08) (15)X1 + (.10)(45)X2 + (-13) (100)x3 s 40,000. For the Portfolio Selection problem, the number of shares of stock 1 must be at most 35% of the total number of shares purchased. One appropriate constraint would be: Select one: O a. .65x1 - 35x2 - 35x3 3.35; O b..65x1 - 35x2 - 35x3 = 0; O c..65X1 - 35x2 - 35x3 2 0; O d. X7 s (.35)(x1 + x2).

Answer 1

Hello

Q - 1 - OPTION A is correct

Given the prices and share names and the maximum amount of $40000 to invest,

The appropriate constraint would be:

$$45x_1+\$15x_2+\$100x_3 \leq \$40,000$

Q - 2 - OPTION B is correct.

$\\ x_1\leq 0.35*(x_1+x_2+x_3 ) \\ \\ 0.65x_1-0.35x_2-0.35x_3\leq 0$

Thanks!

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