- This risk diversification allows an FI to predict more accurately its expected return on its asset portfolio.
- Though this asset portfolio that we have designed has still some imperfections, it has created a great deal chance of making profits.
- From the angle of mutual joining network in the capital market, we discuss the problem of financial asset portfolio optimization and balance scale.
- Further, as the umber of securities in an FI's asset portfolio increases, portfolio risk falls, albeit at a diminishing rate.
- This reason is that it ignores the different risk preference of individual bank and banks may choose asset portfolio at high risk to retard the efforts of the regulators.
- Obviously, the bond fund and so on regular earnings class product should be the asset portfolio disposition conventional investment variety, but certainly not temporary “expedient base”.