The critical line method for mean-variance portfolio selection,
developed by Harry Markowitz over a half a century ago, is an
important analytical tool for modern portfolio management. The
method in its original form is a sophisticated algorithm for
portfolio optimization under general linear constraints.
Therefore, a challenge for instructors of investment courses is
how to explain the method to business students who are
unfamiliar with advanced mathematical and programming tools.
This study illustrates pedagogically that, under practically
relevant constraints including investment limits on individual
securities and disallowance of short sales, the method can still
be covered in investment courses where only general algebraic
skills and statistical concepts are required. The use of
electronic spreadsheets for portfolio construction not only
significantly reduces the computational burden, but also makes
the analytical materials involved less abstract for business
students. This study, which provides spreadsh