Honors Senior Theses/Projects

Date of Award

6-1-2015

Department

Honors Program

Faculty Advisor

Matthew Nabity

Honors Program Director

Gavin Keulks

Abstract

Investing is critical in the business world and is an avenue to make profit for many. Making the decisions of what to invest in involves intricate mathematics in order to reduce risk. We investigate portfolio optimization, which is a branch of economic and financial modeling that typically has the goal of maximizing an investment's expected return. We explore a linear programming approach to a decision model for a first time investor. Our results are compared to our expectation and different outcomes are computed based on adjusting our models used for calculating rates of return and failure rates in order to best capture reality. We then explore how changing our constraint of confidence in our investment affects the distribution of the model.

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