Results

The final results of different degrees of diversification are shown in the table below.

Model Degree

Average Price Depreciation Among Assets

Average Percent of Assets Sold Among Firms(%)

Total Number of Firms Committing Fire Sales

0

0.0980

76.77

6

7.98

0.0949

23.69

6

53.09

0.0928

36.07

6

60.08

0.0931

28.56

6

70.56

0.0576

36.56

5

75.05

0.0607

36.12

5

81.04

0.0758

42.38

6

100

0.0802

76.68

6

Table 1: Final values of the average asset price impact, average percentage of assets sold, and total number of firms committing fire sales for models with varying degrees of asset diversification.

When analyzing the results of our model with different degrees of asset diversification, we considered three measurements to reflect the final stability of the system: the final price depreciation of assets, the total units of assets sold, and the total number of firms committing fire sales within the system. With this in mind, we concluded that the portfolio with a degree of diversification within the range of 70-75 produces the most stability within a financial system. For more information on the methods we used to arrive at this conclusion, please refer to the Conclusion section in our final report.