A company wants to determine how many units of each of two products, A and B, they should produce. The profit on product A is $50 and the profit on product B is $45. Applying linear programming to this problem, which of the following is the objective function if the firm wants to make as much money as possible?HINT: Maximize Z where Z will be equal to $50 times the number of product A units produced PLUS $45 times the number of product B units produced. Since we want to make as much money as possible, we would like that mix of A and B that will let Z be as large as possible.

Here we have total sales equation as under:

Z = 50*A + 45*B

Z is the total sales of the two products A & B. Whereas $50 is the profit per unit on the product A and $45 on the product B.

This means our best wishes for the company includes that the company only sales product A and reach production limit, because the profit on unit A is more than the product B. So this is the objective of the company regarding the sales prioritization of products.

Systematic portion of unexpected return = 0.9%

Unsystematic portion = 1.4%

Explanation:

Expected Return from Stock A :

= +

wherein,

=  Risk free rate

= Expected market return

B= Beta , a measure of sensitivity.

= 3 + 1.2 (9 - 3) =  10.2 %

Actual Return = 12.5%

Excess of actual return over expected return = 12.5 - 10.2 = 2.3%

Actual market return = 9.75%

Excess of actual market return over expected market return

= 9.75 % - 9 % = 0.75%

Excess market systematic return = 0.75%  × B

                                                         = 0.75 × 1.2 = 0.9%

Hence, systematic portion of unexpected return = 0.9%

Thus, unexpected portion = 2.3% (excess security return) - 0.9% (excess market return)

= 1.4 %