Risk aversion
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 Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Risk aversion. A risk-averse investor dislikes risk and requires a higher rate of return as an inducement to buy riskier securities.
