Respuesta :
The aforementioned claim is accurate. In a formulation for portfolio selection, the linear programming goal is to maximize return.
The goal of portfolio selection is to evaluate a group of securities from a wide range of potential choices. It seeks to maximize investors' investment returns. Investors must choose between profit maximization and risk mitigation, according to Markowitz (1952).
Investors might choose to focus on risk reduction for a specified level of return or on return maximization for a degree of risk that is taken into account. The expected value of securities' earnings was another factor used by Markowitz to calculate investment return. Risk, according to Markowitz, is the deviation from the expected value.
The conventional mean-risk methods that lead to linear programming models correspond to certain methods of solving our multiple criteria model.
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