Optimal Fund Allocation from Certain Investment Portfolio Using Backward Dynamic Programming Recursions with Electronic Implementations

Abstract

This research article investigated the problem of fund allocations from certain investment portfolio and obtained the optimal investment strategies using backward dynamic programming recursive approach. In the sequel, the article conceptualized, formulated and designed Excel solution templates and corresponding algorithm for the optimal allocation of funds from the investment portfolio. The work also provided illustrative examples which demonstrate the efficiency, utility and processing power of the solutions templates. The deployment of the solution templates circumvents the inherent tedious, and prohibitive manual computations associated with dynamic programming formulations and recursions and may be optimally appropriated for sensitivity analyses on such models.