Data Intelligence, Business Analytics
Following to my previous article posted on link: http://emfps.blogspot.com/2012/08/emfps-how-can-we-get-power-set-of..., let me tell you one of the applications of this method in Risk Management. In this article, I am willing to solve a case in which the template is referred to my article of “EMFPS: Efficient Portfolio of Assets (The Optimization for Risk, Return and Probability)” posted on link: http://emfps.blogspot.com/2011/10/emfps-efficient-portfolio-of-asse....
The Case: To Find Minimum Risk for Portfolio of Assets in Variety of the Outcomes
If we have had a range of probability for our outcomes where there is not the same probability assigned to the outcomes, how can we calculate minimum risk for the portfolio of assets? What are the probability distributions assigned to the expected portfolio return in which we will have minimum risk?
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