Study On Risk Decision-Makingon Model And Its Algorithm For Investment Project Portfolio

Enterprises and other investment agents are often faced with many investment chances and need to choose them carefully. There are many uncertain factors in the course investment, so most investment decision-making is risk decision-making. The problem of project portfolio risk decision-making is a very complex problem. The study on it helps to enhance the risk consciousness, to improve the rationality and validity of decision-making, to reduce the investment cost, to increase ultility and to avoid the investment blindness. So this paper has very important theoretical and pactical significance.In many cases, investors cannot accept all of them and usually choose some of them, because limited fund and other resources are dissatisfied with all the projects. Investors have most concerned that how to optimize fund and other resources and how to sequence these investment projects in the course of project portfolio which aim at maximizing yield and minimizing risk. For invertors, the course of investment project portfolio is to balance between yield and risk. At present, the researches on project portfolio decision-making emphasize on the dispensation of resources (capital chiefly), which aims at getting more profit, while the research on portfolio risk is few, so it is necessary to research into them.Firstly, the conceptions concerned and the process history of the project portfolio problem are introduced, and the theory and methodology of portfolio are summed up, and then point out the processing mode of tradeoff between yield and risk, which provides theoretical reference for the continuation of this paper. Secondly, the author analyzes and compares internal and overseas methods concerned investment project portfolio, and then indicates their deficiency. Thirdly, the author figures out the characteristic of investment project portfolio by comparing it with securities portfolio. Based on above discussion, this paper presents a risk decision model of investment project portfolio taking exampling by modern portfolio theory. The model gives expression to the feature of project portfolio and aims at the deficiency of traditional solutions. The investing sequence is considered and the combinatorial risk is introduced into it. The purpose for this model is to rationally allocate the capital and other resources and to maximize the profit of investment project portfolio within the risk bearing capability. Finally, the paper presents an easy way to solve the model on basis of analyzing the model feature, which invert nonlinear programming problem to linear problem. Thus Excel solves the model. At last, there is an example, which validated the validity of the way. Compared with the answer in traditional way, the validity and advantage of the model is validated.