-

In this paper it has been tried to specify the optimum portfolio of investment, and compare it with the actual portfolio of agricultural bank in the past years using the Expected income Variance (E-V) method. In addition, in this study it has been tried to estimate the presumable costs that might be incurred by the bank, when it follows the development objectives. The results show that the behavior of the bank in allocating resources deviated from the one suggested by the optimum portfolios. Thus, it implies that the bank has not taken into account the risk associated with the activities in allocating the resources. The risk consideration can improve the bank’s performance
and, consequently, increase the earnings. In addition, the results indicate that allocating more than 6 percent of bank’s financial resources to farming, horticulture and animal husbandry activities as part of the bank’s development commitments, causes a considerable reduction in the bank’s earnings as these groups of production activities are riskier.