Use the table below to answer the following question(s).
Jonathan Reese is considering three stocks in which to invest with a fixed budget.The table below provides information on Jonathan's expected returns for each stock.The table also provides information, collected from market researchers, on the variance-covariance matrix of the individual stocks.He expects a total return of at least 10%.

Develop a quadratic optimization model to find the optimal allocation of the budget to each stock, and variance calculations for squared terms and cross-products based on the variance-covariance matrix.
-According to the model, what is the squared term value for Stock 3 variance?
A)0.00018
B)0.00080
C)0.00096
D)0.00194

Question

Use the table below to answer the following question(s).
Jonathan Reese is considering three stocks in which to invest with a fixed budget.The table below provides information on Jonathan's expected returns for each stock.The table also provides information, collected from market researchers, on the variance-covariance matrix of the individual stocks.He expects a total return of at least 10%.
  
Develop a quadratic optimization model to find the optimal allocation of the budget to each stock, and variance calculations for squared terms and cross-products based on the variance-covariance matrix.
-According to the model, what is the squared term value for Stock 3 variance?
A)0.00018 
B)0.00080 
C)0.00096 
D)0.00194

Quizplus · Accepted Answer

The squared term value for Stock 3 variance is 0.00018, which is choice A.

Use the Table Below to Answer the Following Question(s)