optimization

Definition

Putting together a portfolio in such a way that return is maximized for a given risk level, or risk is minimized for a given expected return level.

Use optimization in a sentence

The optimization process could take many, many years and it would be really hard and strenuous the entire time it was going on.

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John and Jane had a lunch date downtown, but John called and said he would not make it until he completed his optimization task.

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The portfolio optimization was well received because, prior to this, there were some concerns with regards to risk and diversification.

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Black-Litterman Model modern portfolio theory