Reconsider the portfolio selection example given in Section 8.2. A fourth stock (Stock 4) now has been found that gives a good balance between expected return and risk. Using the same units as in Table 8.2, its expected return is 17% and its risk is 18%. Its joint risk per stock with Stocks 1, 2, and 3 is 2 0.015, 2 0.025, and 0.003, respectively.

a. Still using a minimum acceptable expected return of 18%, formulate the revised quadratic programming model in algebraic form for this problem.

b. Display and solve this model on a spreadsheet.

c. Develop a revision of the parameter analysis report in Figure 8.14 for this revised problem.