Portfolio Selection using Min-Max Approach

61 A portfolio is usually defined as any collection of assets held by an investor. These assets include real as well as financial assets. However, in the context of this paper, the discussion is restricted to financial assets or securities. When an amount is invested in any security, it is expected to be held by the investor for a certain period of time. The investor expects monetary return from such investment. An investment in a fixed deposit can fetch an assured rate of return in the form of interest on the deposit amount. On the other hand, an investment in a security of a company may not guarantee an assured rate of return. The return may change depending upon different factors. It may be higher than the interest earned on a fixed deposit or can be very high. In some cases, the investor may actually incur loss. Investment in such securities has risk associated with it. Is it possible for investors to minimize the risk or loss associated with such securities?