BU Market-Value Dollar Investment* Shares Price Proportion ($ million) Desired   $45.00 .5906 76.772 1,706,037 42.50 .5767 74.966 1,763,908 40.00 .5618 73.034 1,825,843 39.00 .5556 72.222 1,851,852 37.50 .5459 70.961 1,892,285 35.00 .5287 68.731 1,963,746     *Dollar investment BU proportion $130 million.     investor funds in our hypothesized economy are given to an index fund-named Index- to manage. What will it do? Index is looking for a portfolio that will mimic the market. Suppose current prices and market values are as in Table 9.1. Then the required proportions to mimic the market port- folio are:   wBU 195/(195 156) .5556 (55.56%); wTD 1 .5556 .4444 (44.44%)   With $130 million to invest, Index will place .5556 $130 million $72.22 million in BU shares. Table 9.4 shows a few other points on Indexs demand curve for BU shares. The second column of the Table shows the proportion of BU in total stock market value at each assumed price. In our two-stock example, this is BUs value as a fraction of the combined value of BU and TD. The third column is Indexs desired dollar investment in BU and the last column shows shares demanded. The bold row corresponds to the case we analyzed in Table 9.1, for which BU is selling at $39. Indexs demand curve for BU shares is plotted in Figure 9.2 next to Sigmas demand, and in Figure 9.3 for TD shares. Indexs demand is smaller than Sigmas because its bud- get is smaller. Moreover, the demand curve of the index fund is very steep, or "inelastic," III. Equilibrium In Capital Markets 9. The Capital Asset