Average Rate of Return With Uncertainty

In Greco S. Bouchon-Meunier B, Coletti G, Fedrizzi M, Matarazzo B, Yager RR (Eds). Advances in Computational Intelligence, 14th International Conference on Information Processing and Management of Uncertainty in Knowledge-Based Systems (IPMU 2012), Catania, July 9-13.

10 Pages Posted: 23 Mar 2021

See all articles by Maria Letizia Guerra

Maria Letizia Guerra

University of Bologna - Department of Statistics; Department of Statistics "Paolo Fortunati"

Carlo Alberto Magni

Università degli studi di Modena e Reggio Emilia (UNIMORE) - School of Doctorate E4E (Engineering for Economics-Economics for Engineering)

Luciano Stefanini

University of Urbino Carlo Bo - Faculty of Economics

Date Written: March 2, 2021

Abstract

In this paper we introduce uncertainty in the investment appraisal, managed through a new criterion called Average Internal Rate of Return (AIRR), introduced in Magni (2010). The consistency of the arithmetic of variables represented with intervals or fuzzy numbers makes it possible to apply the extension principle whereby a rigorous analysis of the investment decisions under uncertainty is accomplished.

Keywords: investment decisions, interval arithmetic, fuzzy numbers, extension principle

JEL Classification: C02, C44, G31

Suggested Citation

Guerra, Maria Letizia and Magni, Carlo Alberto and Stefanini, Luciano, Average Rate of Return With Uncertainty (March 2, 2021). In Greco S. Bouchon-Meunier B, Coletti G, Fedrizzi M, Matarazzo B, Yager RR (Eds). Advances in Computational Intelligence, 14th International Conference on Information Processing and Management of Uncertainty in Knowledge-Based Systems (IPMU 2012), Catania, July 9-13. , Available at SSRN: https://ssrn.com/abstract=3796266

Maria Letizia Guerra

University of Bologna - Department of Statistics ( email )

Bologna, 40126
Italy

Department of Statistics "Paolo Fortunati" ( email )

Bologna, 40126
Italy

Carlo Alberto Magni (Contact Author)

Università degli studi di Modena e Reggio Emilia (UNIMORE) - School of Doctorate E4E (Engineering for Economics-Economics for Engineering) ( email )

Italy

Luciano Stefanini

University of Urbino Carlo Bo - Faculty of Economics ( email )

Via Saffi 42
61029 Urbino
Italy

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