Application of fuzzy theory to term based portfolio selection

We study the application of fuzzy theory to term based portfolio selection. In order to maximize future returns, proper structuring of portfolio is highly critical. We document that fuzzy decision theory can be successfully applied to selection of securities to form short-term liquidity portfolio with varying maturity period. The results indicate that fuzzy logic aids in the extraction of useful information from sample dataset, where a portfolio manager may have low confidence in his prediction. To exemplify, we consider a portfolio of treasuries: bonds, notes and bills, and emphasize how fuzzy logic can be utilized in deciding the distribution of securities across maturities of varying value, to maximize returns