Portfolio Risks And Options Of A Binary Tree

Portfolios theory is one of the important research contents in Economics. It aims to attain the portfolios of the maximum of the investment's return with the given value of the risk of portfolios or of the minimum of investment's risk with the given level of the investment's return . In order to reduce the system risk , some scholars put forward method of VAR or CVAR, Because of its eminent properties, CVaR is given attentions by more and more researchers in particular, and becomes a latest research content in financial risk management.The classical Markowitz model and relative models are introduced in the first , and we improved the semi-variance model based on this . We imply Genetic Algorithms to calculate it and find optimum solution .Also the new methods' for risk measurement such as VaR and CVaR method are studied in this paper , in which some characters are discussed and simulation on normal distribution .Considering the complexity in actual investment field , one portfolio may contain many kinds of finance tools, we discuss the pricing of option binary tree , and give a method of building parameter and some discussion about the risk of option . Finally, we introduced two methods of returns forecasting .giving a new way for future research .