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Risk-Neutral

   Also found in: Wikipedia 0.01 sec.
Risk-neutral
Insensitive to risk.

Risk Neutral
A situation in which an investor effectively ignores risk in making investment decisions. Given two investments with different levels of riskiness, a risk neutral investor considers only the expected return from each investment. As such, being risk neutral differs significantly from both risk aversion and risk seeking.


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These insurers also use a risk-neutral approach to set investment assumptions and discount rates.
In that setting, they show cross-price impact to be the equilibrium outcome of strategic trading activity among risk-neutral speculators across many assets in order to mask their information advantage about some other assets.
A risk seeker would use maximax, a risk avoider would use maximin and the risk-neutral decisionmaker would use expected values.
 
 
 
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