Credibilistic portfolio optimization. Individual investors perspective

Credibilistic portfolio optimization. Individual investors perspective

The fundamental goal of every financial investment is to maximize profit. A sharp increase of turnover in the financial markets led to the rapid development of studies in the field of investment portfolio optimization. These studies focus mainly on measuring the risk associated with an investment, and the maximization of profits. Nowadays, individual investors are overwhelmed with investment options as well as a continuous flow of data. For this reason we will focus in this publication on the perspective of individual investors. As experiments have shown, investors do not strictly adhere to the principles presented in normative market models. In economic practice, the data available to a decision maker is often random, inaccurate, and often expressed in approximate or even linguistic form. This book synthesizes elements of fuzzy variable theory in the light of Liu's credibility theory for the needs of portfolio analysis.