risk aversion

(redirected from Risk averse)
Also found in: Dictionary, Wikipedia.
Related to Risk averse: Risk neutral

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 ?
The same percentage of Newcastle businesses view the private sector as too risk averse.
Partners who are risk averse (seeking) are more likely to assess a lower (higher) likelihood of retaining a risky audit client.
If earlier marriages are more likely to end in divorce, or the more risk averse are more likely to stay in a bad marriage, then risk attitudes impact welfare through the marriage market, not just through the financial market.
Convincing a risk averse board that you can do the job requires you to demonstrate appropriate accomplishments of sufficient scale and scope.
Exploratory tests suggest that Indonesian households are indeed quite risk averse because of subsistence constraints.
There is too much time and too much money tied up in the process to get it wrong, which breeds a risk averse culture with its eyes sharply focused on the bottom line and 10-day returns.
And because Asian cultures tend to be risk averse, corporate leaders are less likely to take on ambitious projects that may fail.
You suggest this high failure rate could make companies risk averse.
When the problem is evaluated for a risk averse individual, the threshold falls because the treatment option is risk reducing; risk averse patients demand treatment more often than risk neutral patients.
In its extreme manifestation, many economic decisionmakers not only become risk averse but attempt to disengage from all risk.
He knows full well the value in trophy deals ("I've done more trophy deals, than anyone else in the business," he claims) and thus isn't risk averse.
Japanese savers, risk averse as ever, are still keeping the bulk of their money in the bank deposits and life insurance products which make up Japan's traditional "indirect financing" system.

Full browser ?