Problem: Minimising Downside Risk - Purchasing and maintaining a portfolio of assets so as to minimise the risk of losing value.
An obvious objective and common strategy in
investing is to minimise the risk of losing ground. What'sBest can help you to accomplish
You have forecasts for the expected return of each asset under seven equally likely
scenarios - there is a transportation strike, interest rates rise or fall, crops
fail, Cubs win world series, Bulls win NBA finals, etc. You know that if you invest 100%
of your capital in Asset 2, the average return under all possible scenarios (your expected
return) is 19.9%.
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