Risk-averse


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Related to Risk-averse: Risk neutral

Risk-averse

Describes an investor who, when faced with two investments with the same expected return but different risks, prefers the one with the lower risk.

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.
References in periodicals archive ?
These challenges stem from current operating environment and risk-averse sentiment of investors towards non-banks, particularly wholesale-oriented financiers.
Is Gen Z risk-averse? "I prefer staying on the safe side of things rather than risking it and losing everything.
The writeup, based on the work of Carter Cast, a clinical professor at the Kellogg School of Management at Northwestern University, argues that budding executives can succeed at this by figuring out the difference between risk mitigation and being risk-averse.
That many decision makers are risk-averse has been amply documented in the finance and economics literature; see, for example, Neumann and Morgenstern [8], Markowitz (1959), Jorion [9], and Szego [10].
Colin Sempill, Managing Director of SSE Enterprise Telecoms, said: We have always strived to deliver the most resilient, high capacity network in the UK and this is why we work with some of the most risk-averse enterprises.
Studies on our economy have made India look like a risk-averse country.
Many investors are now very risk-averse and looking for what they consider to be safe havens for their money.
MEP Wolf Klinz (ALDE, Germany) called Europe "risk-averse and anti-technology," and said foreigners are looking for "a more positive environment".
Export-oriented issues were boosted on the yen's fall as a risk-averse mood eased after House Speaker John Boehner announced a proposal for a temporary extension to the U.S.
"We know that banks are risk-averse to lending at the moment but it should also be understood that businesses, especially SMEs, are also nervous about borrowing in the current trading conditions.
If schools are to stay open they must be freed from the shackles our risk-averse society has produced.
First, we obtain the rational expectation (RE) equilibria under the rational expectations hypothesis firstly proposed by Muth [2] for the risk-averse retailer.

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