Abstract
Strangely enough, investors invest in high-risk low-profit enterprises as well. At first glance, this seems to contradict common sense and financial basics. However, we show that such investments make perfect sense as long as the related risks are independent from the risks of other investments. Moreover, we show that an optimal investment portfolio should allocate some investment to these enterprises [1,2,3,4,5,6].
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Acknowledgements
This work was supported in part by the National Science Foundation grants 1623190 (A Model of Change for Preparing a New Generation for Professional Practice in Computer Science), and HRD-1834620 and HRD-2034030 (CAHSI Includes), and by the AT&T Fellowship in Information Technology.
It was also supported by the program of the development of the Scientific-Educational Mathematical Center of Volga Federal District No. 075-02-2020-1478, and by a grant from the Hungarian National Research, Development and Innovation Office (NRDI).
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Kosheleva, O., Kreinovich, V. (2023). Why Would Anyone Invest in a High-Risk Low-Profit Enterprise?. In: Ceberio, M., Kreinovich, V. (eds) Uncertainty, Constraints, and Decision Making. Studies in Systems, Decision and Control, vol 484. Springer, Cham. https://doi.org/10.1007/978-3-031-36394-8_17
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DOI: https://doi.org/10.1007/978-3-031-36394-8_17
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