Type-2 Fuzzy Expert System Approach for Decision-Making of Financial Assets and Investing under Different Uncertainty

Table 2

Summary of variables used as inputs.

Variable		Description
Return	Annual return	Standardized rate of return for one year.
	Return above benchmark	Return achieved over the return achieved by the underlying index or basket of assets.
	Return above risk-free rate	A risk premium required by an investor when investing in an asset with a higher risk than government bonds.
Risk	Standard deviation	Indicates the quadratic average of the deviations of the fund's portfolio returns from the arithmetic average, i.e., the square root of the variance.
	Systematic risk	It results from the overall economic situation and individual macroeconomic variables, so it is undiversified and affects all economic entities.
	Specific risk	It is a unique risk for each asset and can be eliminated by appropriate portfolio diversification.
	Tracking error	Measures variations in fund portfolio and benchmark performance.
Performance	Information ratio	It compares the fund's performance with the market's performance taking into account risk.
	Treynor ratio	It represents a reward for volatility and assumes that the fund eliminates unique risk by appropriate portfolio diversification and only counts on systematic risk.
	Jensen alpha	It measures the ability of the fund manager to generate a fund return above the return given by the benchmark and the ability to deal with systematic market risk.
	Appraisal ratio	It expresses the additional return, adjusted for the systematic risk per unit of individual risk taken.