Exhibit 7.3
The following questions are based on the problem below.
An investor has $150,000 to invest in investments A and B. Investment A requires a $10,000 minimum investment, pays a return of 12% and has a risk factor of .50. Investment B requires a $15,000 minimum investment, pays a return of 10% and has a risk factor of .20. The investor wants to maximize the return while minimizing the risk of the portfolio. The following minimax formulation of the problem has been solved in Excel.
-Refer to Exhibit 7.3. What formula goes in cell E11?
A) =D11*(C11−B11)/C11
B) =(C11−B11)/C11
C) =D11*C11
D) =D11*(C11−B11)

Question

Exhibit 7.3
The following questions are based on the problem below.
An investor has $150,000 to invest in investments A and B. Investment A requires a $10,000 minimum investment, pays a return of 12% and has a risk factor of .50. Investment B requires a $15,000 minimum investment, pays a return of 10% and has a risk factor of .20. The investor wants to maximize the return while minimizing the risk of the portfolio. The following minimax formulation of the problem has been solved in Excel. 
-Refer to Exhibit 7.3. What formula goes in cell E11?
A) =D11*(C11−B11)/C11 
B) =(C11−B11)/C11 
C) =D11*C11 
D) =D11*(C11−B11)

Quizplus · Accepted Answer

The correct formula to calculate the percentage change in cell E11 is =D11*(C11−B11)/C11. This formula takes the difference between the current year value (C11) and the previous year value (B11), divides by the previous year value (C11), and then multiplies by the base (D11) to get the percentage change.

Exhibit 7.3 The Following Questions Are Based on the Problem Below