Selecting and Simulating Models for Management of Investment Portfolios Using Cybernetic Approach

Abstract

Summary:

The theory of investment portfolios is a well defined component of financial science. While sound in principle, it faces some setbacks in its real-world implementation. The authors state that cybernetics present an unorthodox "new" way of studying the process of portfolio management. First, the known theory is translated in cybernetic terminology. Second, various known models of investors are competed systematically on a unified data track. Third, by heuristic restructuring new models of investors may be assembled, which in turn are to be competed as well.