Investment Manager Max Gaines Has Several Clients Who Wish to Own

question 18

Essay

Investment manager Max Gaines has several clients who wish to own a mutual fund portfolio that matches,as a whole,the performance of the S&P 500 stock index.His task is to determine what proportion of the portfolio should be invested in each of the five mutual funds listed below so that the portfolio most closely mimics the performance of the S&P 500 index.Formulate the appropriate nonlinear program.​ ​

---

Definitions:

Variable Cost

Costs that change in proportion to the level of goods or services produced by a business.

Production Level

The quantity of goods a company produces within a specified period, usually in relation to its capacity.

Cost-Volume-Profit Analysis

A financial analysis tool used to determine how changes in costs and volume affect a company's operating income and net income.

Future Costs

Expected or projected expenses that will be incurred in the future.