Question 12

T/F: For the above Portfolio Optimization problem, the following is a correct set of constraints.

Subject to:

XA*(14%) + XB*(11%) + XC*(10%) <=12.5

XA + XB + XC =100%

A. True

B. False

Question 13

T/F: For the above Portfolio Optimization problem, the optimal solution is to allocate 62.5% to Stock A, 0% to Stock B, and 37.5% to Stock C.

A. True

B. False

Question 14

T/F: For the above portfolio optimization problem, if you wants to invest no more than 50 percent of your cash in any one stock, the following is a correct set of constraints.

Subject to:

XA*(14%) + XB*(11%) + XC*(10%) >=12.5

XA + XB + XC =100%

XA <=50%

XB <=50%

XC <=50%

A. True

B. False

Question 15

T/F: For the above portfolio optimization problem, if you wants to invest no more than 50 percent of your cash in any one stock, the optimization solution is to allocate 50% to Stock A, 0% to Stock B, and 50% to Stock C.

A. True

B. False