Trade off between simplicity and precision of index models
نویسندگان
چکیده
In the basis of contemporary portfolio theory is Markowitz model analysis which accurately defines a set efficient portfolios for relatively small number securities in its composition. With increase portfolio, application Markowitz's becomes complex, so financial found solution problem single-index Sharpe's model. The later emergence multi-index models, better reflect reality, increased precision determining portfolios, but at cost greater complexity aim research to analyze kind substitution between simplicity and model, search answer question what optimal explanatory factors Using qualitative economic method, it was concluded that (indexes) should be until marginal benefits form are equalized with costs complexity, reduced applicability associated obtaining informations. striving analysts must not overlook index models emerged from practical necessity simplifying original
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ژورنال
عنوان ژورنال: Ekonomika, Journal for Economic Theory and Practice and Social Issues
سال: 2022
ISSN: ['2334-9190', '0350-137X']
DOI: https://doi.org/10.5937/ekonomika2201043l