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It means you should buy the 4 stocks. The model you are using seems to restrict short selling, i.e. by removing this restriction you could get negative weights on certain assets with all assets adding up to 100%. Re your question on limiting your asset selection to stocks that are expected to outperform the population: this has to do with your assumptions ...


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The last 2 calls must be changed from library(portfolio.r) library(portfolio_noshorts.r) to source(portfolio.r) source(portfolio_noshorts.r) The correct files must be availbale at http://faculty.washington.edu/ezivot/econ424/



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