portfolio selection in tehran stock exchange market with a genetic algorithm

Authors

حمید رضا نویدی

دانشگاه شاهد احمد نجومی مرکید

حجت میرزازاده

abstract

portfolio selection is considered a critically significant decision, firms have to make. as such, much research has been focused on the selection of a portfolio with a controlled level of risk and high expected return. this paper uses a new definition of risk for portfolio selection whereby risk taking is taken as a curve instead of a specific value. in this paper, a genetic algorithm is presented for portfolio selection. stochastic simulation is used to calculate the expected values and the values of the risk curve function. finally, as a case study, the algorithm has been used for portfolio selection in tehran stock exchange. the results of the algorithm and the experiment show that the designed algorithm is very effective for solving the portfolio selection problem. jel classification: g1, g11

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