liangfeng

mik82 Wrote:
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> The B-L model uses mkt equilibrium weights and
> covariance to solve for the expected return.
> However, the formula is not presented in the book.
> I don't know exactly how that's done
> mathematically. Once the expected returns are
> calculated, then they are adjusted to reflect the
> investor's views and the confidence level in those
> views. Lastly, optimization is used to calculate
> asset weights, just like in MV. Can anybody
> correct/enhance my explanation? I have to say that
> the B-L, re-sampling EF and other parts of asset
> allocation are poorly written. So confusing.

this is a very good explanation