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Optimal investment strategy based on jump - diffusion model
Author: Zhao
Tutor: ZhaoPeiBiao
School: Nanjing University of Technology and Engineering
Course: Finance
Keywords: Jump - diffusion model Mean - variance Portfolio Random linear quadratic Efficient Frontier
CLC: F830.59
Type: Master's thesis
Year: 2010
Downloads: 52
Quote: 0
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Abstract
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\strategy , given the efficient frontier of the portfolio . This article in the work XYZhou and D.Li on the basis of , consider the portfolio selection problem when asset prices change process to meet the jump - diffusion differential equations . Analog in XYZhou , and D.Li of research ideas , using the extended Ito rule , part of the jump in asset price movements are decomposed into two parts of the non - random and stochastic , then investors want to maximize their return on investment the dual objective function to minimize its risk weight by two goals give the corresponding rights , further rewritten into a single objective function . Use of modern control theory in stochastic linear quadratic control theory , optimal control to meet the objective function is obtained , that gives the analytical solutions for risk-free assets and risky assets investment share . Likewise , we are also given the optimal portfolio selection problem efficient frontier . The results of this paper can be seen as a natural extension of the work XYZhou and D.Li .
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CLC: > Economic > Fiscal, monetary > Finance, banking > Finance, banking theory > Investment
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