Portuguese translation: função da utilidade quadratica
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11:21 Oct 13, 2000
English to Portuguese translations [PRO] Tech/Engineering
English term or phrase:QUADRATIC UTILITY FUNCTION
"The (mean) return and risk of a portfolio of assets, under the assumption that returns on individual assets are normally distributed (or that asset managers have a QUADRATIC UTILITY FUNCTION), are given in equations (9.1), (9.2), and (9.3). An assumption either that individual asset returns are normally distributed or that managers of an FI exhibit a particular set of preferences (QUADRATIC UTILITY) toward returns implies that only two moments of the distribution of assets returns are necessary in order to analyze portfolio decisions: (1) the mean return of a portfolio and (2) its variance (or the standard deviation of the returns on that portfolio). MPT itself, being based on expected returns and risks, is forward-looking; these, by definition, are unobservable. As a result, portfolio returns and risks are usually estimated from historic time series of the returns and risks on individual assets."
Explanation: This has to do with Statistics, and specifically the root-mean-square-value (rms).
rms = Square root of [(1/n). Sum (xi squared)]
I think that the "Função quadrática" is this Sum of the individual x values squared (raised to the exponent 2), where each x represents individual asset performances over a period of time.
Luis Luis United States Local time: 00:29 Native speaker of: Portuguese PRO pts in pair: 132