Model of Static Portfolio Choices
Journal Title: Revista Romana de Statistica - Year 2016, Vol 64, Issue 1
Abstract
In decentralised economies the financial markets has a key role, being considered as institutions that transfer entrepreneurial risk to consumers. The entrepreneurial risk is assumed by the investors as part of the industrial or infrastructure investment that could be considered as the engine of the economic growth. The risk related to the investments finally is transferred from the investors to the tax paying population which statistically can be considered as risk-averse. The problem of the investors is to determine the optimum balance between the assumed risk and the expected performance, but having a limited investment capital. In this paper we examined a simple version of the problem convincing risk-averse people to accept the purchase of risky assets by receiving an additional premium on it. Also, we focus on behaviour of investors who spend the entire investment at the end of the analysed period, but for simplicity we detach the time component of the equation.
Authors and Affiliations
Mădălina Gabriela ANGHEL, Gyorgy BODO, Okwiet BARTEK
Keywords
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