risk aversion

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Related to Risk Avoidance: Risk Mitigation, Risk reduction

Risk Aversion

The subjective tendency of investors to avoid unnecessary risk. It is subjective because different investors have different definitions of unnecessary. An investor seeking a large return is likely to see more risk as necessary, while one who only wants a small return would find such an investment strategy reckless. However, most rational economic actors are sufficiently risk averse such that, given two investments with the same return and different levels of risk, they would choose the less risky investment.

risk aversion

The tendency of investors to avoid risky investments. Thus, if two investments offer the same expected yield but have different risk characteristics, investors will choose the one with the lowest variability in returns. If investors are risk averse, higher-risk investments must offer higher expected yields. Otherwise, they will not be competitive with the less risky investments.

risk aversion

the tendency for managers, consumers and other decision-makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.

risk aversion

the tendency for managers, consumers and other decision makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.
References in periodicals archive ?
Young doctors are aware of these problems and there is a concern that young practitioners will also avoid obstetrics and gynaecology as a career choice as they realise that their career options in private practice are severely curtailed--another form of obstetric risk avoidance.
Risk avoidance and risk management are two different things.
Mary Mazza is senior sales executive specializing in the construction industry and is responsible for all lines of property casualty insurance and risk management services including contract review, seminars, and industry-specific risk avoidance and consultation.
Gradually, without compromising their risk avoidance, they pushed the run rate above two-an-over as England tired in their task to try to induce a mistake.
We need to be alert and informed about the world around us as it bears directly on risk avoidance.
Parents whose children have the recommended number of visits receive regular health education and guidance about risk avoidance, cognitive development and emotional health and social development," the study's authors wrote.
But since SOX was passed, the SEC better clarified the spirit of the law away from box-checking and towards actual risk avoidance.
In other word, the risk controlling is achieved using risk avoidance.
Foreign institutional investors tend to pull out money from emerging markets when there is global risk avoidance.
A certain degree of risk is healthy because companies who focus only on risk avoidance may overlook opportunities to create value," says Mike Boehlje, Professor of Agricultural Economics at Purdue University.
But one watching chemist couldn't resist a joke at our risk avoidance technique.
But it is more like risk avoidance receding than (investors) taking on risk,'' said Masatoshi Sato, senior strategist at Mizuho Investors Securities Co.