Search results
Results from the WOW.Com Content Network
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 this case, the resources and technological constraints are Robinson Crusoe's labour. [1] The shape of the PPF depends on the nature of the technology in use. [1] [9] Here, technology refers to the type of returns to scale prevalent. In figure 6, the underlying assumption is the usual decreasing returns to scale, due to which the PPF is ...
Alternatively, if the constraints are all equality constraints and are all linear, they can be solved for some of the variables in terms of the others, and the former can be substituted out of the objective function, leaving an unconstrained problem in a smaller number of variables.
In these situations, the intertemporal budget constraint is effectively an equality constraint. In an intertemporal consumption model, the sum of utilities from expenditures made at various times in the future, these utilities discounted back to the present at the consumer's rate of time preference , would be maximized with respect to the ...
Assuming that the cash flow calculated does not include the investment made in the project, a profitability index of 1 indicates break-even. Any value lower than one would indicate that the project's present value is less than the initial investment. As the value of the profitability index increases, so does the financial attractiveness of the ...
Constraints accounting, which is a development in the Throughput Accounting field, emphasizes the role of the constraint, (referred to as the Archemedian constraint) in decision making. [7] Goldratt's alternative begins with the idea that each organization has a goal and that better decisions increase its value.
In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Individuals have different profit objectives, and their individual skills make different tactics and strategies appropriate. [1] Some choices involve a tradeoff between risk and return. Most ...
[1] The subset sum problem is a special case of the decision and 0-1 problems where each kind of item, the weight equals the value: =. In the field of cryptography, the term knapsack problem is often used to refer specifically to the subset sum problem. The subset sum problem is one of Karp's 21 NP-complete problems.