Maximizing investment efficiency while minimizing risk for financial institutions
The article discusses how financial institutions create investment portfolios using a mix of their own funds and borrowed money. They optimize these portfolios to maximize efficiency while managing risk. By using a measure called VaR, they find the best portfolio with the least risk. The study also builds a model for managing these portfolios and determines the best strategies for participants. The research shows that by following these optimal strategies, financial institutions and creditors can effectively manage their investment portfolios and maximize their income.