Merton’s Portfolio Problem

Merton’s portfolio problem is an academic problem that concerns the allocation of a person’s assets to achieve a specific goal.

Merton developed the problem in the early 1940s, and it has been studied by economists and financial analysts for over sixty years.

The problem can be resolved using any number of strategies, but the most common approach is to allocate all of the person’s assets equally to invest in low-risk assets such as stocks or bonds.

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