Analytical Solution on the Wealth of Portfolios of investments for Capital Markets

Abstract

To measure the wealth of a portfolio of investments refers to assessing the overall financial health and values of a collection of investments held by individual or organization; which allows investors to track the performance of their investments over time and understand the wealth on their investment. Therefore, this paper considered two system of second order Differential Equations (ODE) with appropriate stock quantities for variation of portfolios of investments. The problems were analytically solved by adopting the series solution approaches of Frobenius and method of undetermined coefficient; closed form solutions are derived for wealth of portfolios of investments. More so, capital market were effectively analyzed which demonstrated the impact analysis on the wealth of portfolios of investments and other capital market variables were presented graphically. Secondly, we state and prove theorem to show that our proposed model under-goes rate of change property which is informative to investors. To this end, the governing equations are reliable as it realistically addresses the principles of capital market investments.