Financial Portfolio Optimization Methods
Quantification of Financial Risk TO BE EDITED,ADD BIBLIOGRAPHY AND FIGURES
In today's globalized market, financial risk and treatment of it that has gained great importance, especially after the Financial crisis of 2008, where factors which may affect the fragile global economy proved to be thousands and often unconnected to each other. Nations fail to pay their debts and giants of the finance industry bailed out [1]. These financial institutions have developed various quantitative methods which can give a prediction of this risk level in financial portfolios. A financial portfolio is considered the summary of investments owned by an investor ( company or individual )[2]. The first step for the quantitative measurement of risk in portfolios was made by Harry Markowitz in 1952 [3], with the development of the mean-variance model as risk measurement, which shows interest until today(μιν βαριανσημερα) and it is used by investors. Thereafter, various other methods were developed, focusing on alternative risk measures that could lead to linearization of the portfolio optimization problem [4] .
Models of Optimization
Background
The term efficient portfolios was developed in the 1950's by Harry Markowitz [5], [6]
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