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Portfolio optimization is the process of selecting an optimal portfolio (asset distribution), out of a set of considered portfolios, according to some objective.The objective typically maximizes factors such as expected return, and minimizes costs like financial risk, resulting in a multi-objective optimization problem.
In a general context the optimal portfolio allocation in any time period after the first will depend on the amount of wealth that results from the previous period's portfolio, which depends on the asset returns that occurred in the previous period as well as that period's portfolio size and allocation, the latter having depended in turn on the amount of wealth resulting from the portfolio of ...
The primary goal of strategic asset allocation is to create an asset mix that seeks to provide the optimal balance between expected risk and return for a long-term investment horizon. [3] Generally speaking, strategic asset allocation strategies are agnostic to economic environments, i.e., they do not change their allocation postures relative ...
In economics, the field of public finance deals with three broad areas: macroeconomic stabilization, the distribution of income and wealth, and the allocation of resources. . Much of the study of the allocation of resources is devoted to finding the conditions under which particular mechanisms of resource allocation lead to Pareto efficient outcomes, in which no party's situation can be ...
Its scope, though, includes the allocation and management of assets, equity, interest rate and credit risk management including risk overlays, and the calibration of company-wide tools within these risk frameworks for optimisation and management in the local regulatory and capital environment. Often an ALM approach passively matches assets ...
The Partial Allocation Mechanism (PAM) is a mechanism for truthful resource allocation.It is based on the max-product allocation - the allocation maximizing the product of agents' utilities (also known as the Nash-optimal allocation or the Proportionally-Fair solution; in many cases it is equivalent to the competitive equilibrium from equal incomes).
In a business context, operational efficiency is a measurement of resource allocation and can be defined as the ratio between an output gained from the business and an input to run a business operation. When improving operational efficiency, the output to input ratio improves.
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