Risk aversion
From The Art and Popular Culture Encyclopedia
|
Related e |
|
Featured: |
Risk aversion is a concept in economics, finance, and psychology related to the behaviour of consumers and investors under uncertainty. Risk aversion is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, expected payoff. For example, a risk-averse investor might choose to put his or her money into a bank account with a low but guaranteed interest rate, rather than into a stock that is likely to have high returns, but also has a chance of becoming worthless.
The inverse of a person's risk aversion is sometimes called their risk tolerance (for a more general discussion of the concept, see risk).
Unless indicated otherwise, the text in this article is either based on Wikipedia article "Risk aversion" or another language Wikipedia page thereof used under the terms of the GNU Free Documentation License; or on research by Jahsonic and friends. See Art and Popular Culture's copyright notice.
