DOI:

Abstract

This study is to put forward some ideas for an optimal portfolio concerning the asymmetric risk-tolerance of investors, which is supported by the behavioral finance theory. The choice modeling theory is also employed for the sake of various portfolios, thereby investigating the risk-tolerance level of investors. Besides, the insurance issue is also taken into account when the optimization of the value of investment portfolio may maximize the utility of investors; and then draw a conclusion that in case the insurance premium seems an impediment to the return rate, the insurance value will enable investors to cope with a greater risk. The insurance, from a comprehensive view, will surely be useful to make up for risks in price depreciation. Besides, the value equation is to provide investors with a better utility level. Finally, the study refers to the process of risk distribution so as to manage risks in a portfolio of various assets.

Keywords

Behavioral Finance; Investment Portfolio; Portfolio Insurance.