Difference between revisions of "Risk aversion"
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==Definitions== | ==Definitions== | ||
According to [[Organizational Behavior by Robbins and Judge (17th edition)]], | According to [[Organizational Behavior by Robbins and Judge (17th edition)]], | ||
| − | + | :[[Risk aversion]]. The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff. | |
| + | According to [[Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition)]], | ||
| + | :[[Risk aversion]]. Risk-averse investors dislike risk and require higher rates of return as an inducement to buy riskier securities. | ||
==Related concepts== | ==Related concepts== | ||
Latest revision as of 23:45, 1 November 2019
Risk aversion is the tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.
Definitions
According to Organizational Behavior by Robbins and Judge (17th edition),
- Risk aversion. The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Risk aversion. Risk-averse investors dislike risk and require higher rates of return as an inducement to buy riskier securities.
