Risk lover

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 ?
Thus, for example, being risk lover increases the probability of being an entrepreneur in 33 percentage points, while such probability decreases by 37 percentage points when the individual chooses to enter the hypothetical market.
They, thus, propose that risk lovers agents are more likely to evade tax lien, whereas risk adverse subjects are more likely to pay their taxes, even though they may not perceive any tangible benefits from paying.
While this leads us to reject our hypothesis that entrepreneurs would be risk lovers, it is interesting to show that there is not just one type of entrepreneur and that the nature of the entrepreneurs in our sample doesn't fit the previous theory (Kihlstrom & Laffont, 1979) nor the previous empirical findings (Elston et al.
A risk lover would opt for a higher return with a lower probability of occurring, point B in Figure 2-8.
If, for example, a wheat producer is risk averse, he would accept a marketing strategy that would yield less but have a higher probability of occurring than a risk lover.
Should a risk lover ever consider using risk management?
On the other hand, if the individuals' risk index is near zero then this individual is considered a risk lover since relatively few precautions are taken.
TABLE III Impact of Seat Belt Use on Number of Tickets Pooled Estimates Explanatory Variables Coefficients t-statistics Risk Lover Group -.
They conclude that for risk averters and risk lovers, prudence guarantees precautionary saving.
This makes the analysis of the precautionary effort relatively more complicated than precautionary saving, since the optimization problem of precautionary saving for risk lovers (see, e.
They act as intellectuals and behave as risk lovers.
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.

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