Investment Manager Max Gaines Wishes to Develop a Mutual Fund

question 9

Essay

Investment manager Max Gaines wishes to develop a mutual fund portfolio based on the Markowitz portfolio model.He needs to determine the proportion of the portfolio to invest in each of the five mutual funds listed below so that the variance of the portfolio is minimized subject to the constraint that the expected return of the portfolio be at least 4%.Formulate the appropriate nonlinear program.​
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Definitions:

Post-secondary Education

Education that takes place after high school, including college, university, and vocational training.

Trust Fund

A fund comprised of assets, such as stocks, bonds, property, or cash, held in a trust and managed by a trustee for the benefit of someone else.

Monthly Payments

Regular amounts paid monthly to amortize a debt or loan over a set period.

Monthly Payment

A fixed amount of money paid each month for a loan or mortgage over a set term.