$8\mathrm{.}6.$ Beconsider the portifilia selection example, instuding in Tuble $8\mathrm{.}2$ that $8$iock $2$ has the highese cxpected return and Shock $3$ has by far the loweat. Noverthclear, the changing cell: PortSolis $($C$)4$:El$4)$ provide an optimal solution thas calls for purchasing far more of Stock $3$ than of Stack $2.$ Whthagh par chasing so much of Stokk $3$ gready reduces the riak of the port. folio, an aggressive imvestor may be urnvilling to ownn zo much of a stock with sach a low oxpestod retum.

For the sale of such an imestion, add a cocatraime to the model that specifies that the percentaze of stacl. $1$ in the portictic can not exceod the amsant spocifiod by the impeses. Then campare the expecesd reiurn and risk fetandand devintises of the return, $2t$ the following values:

a$.2y^4$