risk aversion

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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.

risk aversion

The tendency of investors to avoid risky investments. Thus, if two investments offer the same expected yield but have different risk characteristics, investors will choose the one with the lowest variability in returns. If investors are risk averse, higher-risk investments must offer higher expected yields. Otherwise, they will not be competitive with the less risky investments.

risk aversion

the tendency for managers, consumers and other decision-makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.

risk aversion

the tendency for managers, consumers and other decision makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.
References in periodicals archive ?
But even when decisionmakers are only somewhat more risk averse, a process of retrenchment can occur.
You suggest this high failure rate could make companies risk averse.
In the same way, market makers on the floor of the New York Stock Exchange are more averse to risk on overcast days--at least that is the finding of Ning Zhu, an assistant professor of finance at the University of California, Davis, and William Goetzmann, professor of finance and management studies at Yale University's School of Management, New Haven, Conn.
After the Great Depression, the last and possibly the greatest balance sheet recession in history, American households and companies became so averse to borrowing that it took three full decades for U.
McGovern also said that they were not averse to importing and drinking the southern beverage of preference, grape wine, though sometimes mixed with local ingredients.
A new Barclays Corporate survey of 300 business leaders nationwide found 43% of respondents said they had shelved plans to invest recently due to current market turmoil, while 66% of corporates expect to see more business failures in their sector and 54% view the private sector as too risk averse.
WITH the winter months fast approaching and many outpatients and visitors to Ysbyty Gwynedd dreading the long walk from the present bus shelter to the main building, especially in inclement weather, I have to ask once again as to why is the hospital management committee so averse, stubbornly averse in my opinion and that of many of my colleagues to moving the bus shelter to a point outside the hospital main building, where there is plenty of space?
Second, if workers are identical and either inequality averse or behindness averse, the firm's profit-maximizing piece rate is lower than it would be if workers were purely self-interested.
MumSharon Osbourne is surprisingly risk averse, managing to quickly go upside down in one vehicle.
The LAUSD has long been averse to change and genuine self-improvement.
If you're risk averse," Boehm says, "avoid going to the beach during spring tides, and particularly during spring ebb tides.
Exploratory tests suggest that Indonesian households are indeed quite risk averse because of subsistence constraints.