Risk-Loving


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Risk-Loving

Describing an investor who is willing to take big risks to increase the potential return on investments. For example, a risk loving investor would be more likely to invest in the IPO of a company with a new and exciting product about which little is known, than to invest in a secured bond issued by a well known and widely trusted company. Critics maintain that risk loving investors accept lower returns for their risk and, as such, are not investing efficiently. See also: Markowitz efficient portfolio.
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Then, if you look at the standard deviation--very large--that seems to be saying that they are big risk takers, the natural interpretation is that most of the richest people are risk-loving or at least not very averse to risk.
That phenomenon is called loss aversion, and predicts that when investors have taken a loss, they become risk-loving and start gambling in order to try to break even.
Using a similar dataset, Bauernschuster, Falck, Heblich, Suedekum, and Lameli (2014) measured the cultural distance between regions in Germany and found that risk-loving people were more mobile over longer distances than were risk-averse people because they were more willing to cross cultural barriers.
That's not to say we think it is going to happen, but more that if it did happen it would have the potential to make a big mess of risk-loving portfolios.
As a rambunctious, risk-loving teen who enjoyed football and the rodeo, Palomarez entered the house he and his mother were about to clean, and a sobering feeling flooded his thoughts as he realized that it was the first house he ever set foot in that had A/C.
For future research, this study suggests specifying the linkages between the entrepreneurs' risk-loving characteristics herein discussed and their learning process over time, in order to investigate whether that learning can help increase their chances of success.
But, while turbulent times may set the stage for transformational leaders, it does not follow that bold and risk-loving leaders are always best suited to address the crises that define such periods.
Incredibly, someone has trawled the furthermost reaches of the bare cupboard to find enough spare change to dig holes in all the roads surrounding the Millennium Stadium, home to some events or other, and fill them with the sensor-operated bollards more commonly seen punching through the undersides of risk-loving drivers' cars in Youtube clips.
For example, an optimistic risk-loving company might gamble to try to get the highest possible payoff, while a pessimistic risk-averter might gamble to get the largest of the minimum possible payoffs.
Since then, other countries have stepped up to provide Greece with energy commodities on a tab, but apparently only the most risk-loving companies within those nations are taking the lead.
So lotteries have a negative expected return for bettors, and, according to economic theory, only risk-loving agents could buy negative expected return assets.
The logic behind this test for risk aversion is that only risk-loving subjects would choose lottery B in the first row, and only risk-averse subjects would choose lottery A in the second-to-last row.