Risk aversion is a fundamental trait shaping how individuals, firms and policymakers respond to uncertain outcomes. It encapsulates the preference for certain outcomes over gambles with equivalent ...

Why are the prices of stocks and other assets so volatile? Efficient capital markets theory implies that stock prices should be much less volatile than actually observed, reflecting an unrealistic ...

According to the orthodox treatment of risk preferences in decision theory, they are to be explained in terms of the agent's desires about concrete outcomes. The orthodoxy has been criticized both for ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Somer G. Anderson is CPA, doctor of ...

Often we confront risks: opportunities where we have some probability of gaining or losing something and have to decide whether or not to accept the opportunity. The simplest risks are financial. For ...

We price equity-linked life insurance with surrender guarantees and account for risk preferences in the form of risk-averse and loss-averse policyholders in continuous time. Risk-averse policyholders ...

Risk aversion persists in October, but sentiment improves from September due to hopes for interest rate cuts and a better macro outlook. Central bank policy boosts confidence, with the highest ...

A risk-averse investor is someone who prefers to emphasize security over potential gains. Their portfolio is built to preserve capital and prevent losses first and pursue growth second. This isn't to ...

Federal Reserve policymakers are flying blind after the US government shutdown starved them of crucial data, and the uncertainty is testing the nerves of investors. A sudden bout of risk aversion ...