Risk lover

(redirected from Risk Lovers)

Risk lover

A person willing to accept lower expected returns on prospects with higher amounts of risk.

Risk Lover

An investor who is willing to take big risks to increase the potential return on investments. For example, a risk lover 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 the secured bond issued by a company everyone knows and trusts. Critics maintain that risk lovers accept lower returns for their risk and, as such, are not investing efficiently. See also: Markowitz efficient portfolio.
References in periodicals archive ?
It also excludes the entire behavioral approach to finance and the role of risk lovers. We think the fundamental bedrock on which all asset pricing models lie should be re-examined.
(21) Such an extension would permit a theory of asset pricing that potentially embraces risk lovers. (22)
(15) Such a small percentage of the subjects are classified as risk loving that comparing the higher order risk attitudes of risk lovers and risk averters as in Deck and Schlesinger (2014) is not meaningful, but this is not the main focus of the current article.
Entrepreneurs are risk lovers: Kihlstrom and Laffont (1979) propose, from a theoretical point of view, that agents with lower risk aversion have a greater propensity to make a venture that those who can't deal with risk so easily.
They act as intellectuals and behave as risk lovers. They fail to predict the rare event which certainly happens sooner or later.
The F/L bias could also originate from bettors' loss-aversion, a behavioral attitude that can make bettors act as risk lovers in order to close their betting day without losses.
25 July 2011 - JP Morgan considers that Swedish drug developer Active Biotech AB (STO: ACTI) offers an attractive risk/reward ratio to risk lovers ahead of the results from a second Phase III study of multiple sclerosis (MS) drug candidate laquinimod.
"If they think the situation will stabilize, they won't run; but if they think it will not stabilize anytime soon, they will run fast," he added, "risk lovers will stay in Egypt and risk neutrals will analyze the situation and those who are afraid of risks will take their money elsewhere."
We observe higher proportions of risk lovers and more than slightly risk-averse subjects than in Holt and Laury pool of subjects, but the differences are small.
(24.) If adult bicycle riders are risk lovers, our estimates of VSL for adults might be too low.
They conclude that for risk averters and risk lovers, prudence guarantees precautionary saving.
Likewise, risk preferrers or risk lovers would be relatively strong candidates for compensating behavior.

Full browser ?