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Topic: Risk averse

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	Insurance - Wikipedia, the free encyclopedia
		Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium and duty of care.
		An entity seeking to transfer risk (an individual, corporation, or association of any type) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, defined as an insurance 'policy'.
		Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
	en.wikipedia.org /wiki/Insurance (6329 words)

	Risk aversion - Wikipedia, the free encyclopedia
		Risk aversion is a concept in economics, finance, and psychology explaining 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.
		In modern portfolio theory, risk aversion is measured as the marginal reward an investor wants to receive if he takes for a new amount of risk.
	en.wikipedia.org /wiki/Risk_aversion (633 words)

	Risk Aversion
		Risk averse means being willing to pay money to avoid playing a risky game, even when the expected value of the game is in your favor.
		Risk aversion means that you would pay more than $100 (the expected or "actuarially fair" value) for an insurance policy that would reimburse you for that $10,000 loss, if it happens.
		The person who wants risk protection, such as a ballet dancer who wants compensation if his or her legs are hurt, pays a group of participants to share the risk.
	hadm.sph.sc.edu /Courses/Econ/RiskA/RiskA.html (3225 words)

	Risk Neutral Pricing of Derivatives (Site not responding. Last check: 2007-10-24)
		Your risk neutrality would mean that every loss you incurred would not bother you; you would see it as only a sidestep in the path to possible future gains.
		Gamblers may appear to be anywhere from risk neutral to risk loving, but in fact they are probably as risk averse as anyone else.
		Using risk neutrality is not the same as assuming that investors are risk neutral.
	www.fenews.com /fen45/teach_notes/teaching-notes.html (1595 words)

	Managing Financial Risk (Site not responding. Last check: 2007-10-24)
		Risk can be defined as the probability of a set of events taking place where characteristics of the underlying probability distribution are unknown.
		Relative risk can be defined in terms of the coefficient of variation, which is the ratio of the standard deviation to the mean of a distribution.
		A risk averse agent may be willing to accept either C or D over A or B as long as the outcome associated with the probability distribution is positive, e.g., winning the lottery, maximizing economic gain, or some positive incentive event.
	alpha.montclair.edu /~lebelp/ManagingFinancialRisk.html (1321 words)

	Home Life Health Auto Car Insurance
		Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used by insurers, in conjunction with additional factors, to determine rate structures.
		With insurance, you are managing risk that you could not otherwise avoid, and which does not present the possibility of gain (pure risk).
		Redlining is the practice of some insurance companies to deny the issuance of coverage in specific geographic areas, usually due to an increased likelihood of risk; the validity of the assessment may be real or perceived, though it is often attributed to discrimination.
	homelifehealthautocarinsurance.info (5451 words)

	Agricultural Contracting: Trading Autonomy for Risk Reduction (Site not responding. Last check: 2007-10-24)
		In the case of hogs, the risk reduction provided by contracts is valuable to risk-averse farmers, who seek to avoid widely fluctuating input and output prices.
		Since risk reduction benefits farmers, we would expect them to pay something for it; that is, we would expect them to accept contracts offering lower returns than they could expect from independent production.
		The risk premium is the value that a farmer would be willing to pay for the risk reduction provided by a contract.
	www.ers.usda.gov /AmberWaves/February06/Features/feature3.htm (2557 words)

	Risk and Return - RISK AND RISK AVERSION
		There is no risk of default and their short maturity means that the prices of Treasury bills are relatively stable." Long-term government bonds, on the other hand, experience price fluctuations in accordance with changes in the nation's interest rates.
		Liquidity risk is the possibility that an asset may not be sold for its market value on short notice, while default risk is the risk that a borrower company will be unable to pay all obligations associated with a debt.
		Individual risk aversion is thus a significant factor in the dynamics of risk and return.
	www.referenceforbusiness.com /small/Qu-Sm/Risk-and-Return.html (971 words)

	risk-averse - Search Results - MSN Encarta (Site not responding. Last check: 2007-10-24)
		Risk (quotations): Careers: Bureaucratic and risk-averse environments are…
		Bureaucratic and risk-averse environments are career killers because of their impact on learning.
		Danger, exposure or vulnerability to harm or risk.
	encarta.msn.com /risk-averse.html (137 words)

	Good afternoon, ladies and gentlemen (Site not responding. Last check: 2007-10-24)
		One of the most risky behaviors and the first casualty in any risk averse organization is the ability or willingness to trust either peers, subordinates, superiors, or the organization as a whole.
		Bluntly put, a risk averse officer corps makes many of the discussions at this conference of values education moot as individuals will not trust the Army to live up to them.
		In a politicized, risk averse organization, the most successful members will be those that have adapted their behavior to the apparent and regularly demonstrated vales of the organization while publicly expressing their support of the supposedly stated values of the organization.
	www.usafa.af.mil /jscope/JSCOPE99/Bell99-2.html (3016 words)

	Risk Aversion, Risk Neutrality, Risk Seeking
		An investor is said to be risk averse if he prefers less risk to more risk, all else being equal.
		The opposite of risk aversion is risk seeking (sometimes called risk loving).
		Between risk aversion and risk seeking is a state called risk neutrality.
	www.riskglossary.com /articles/risk_aversion.htm (235 words)

	Risk averse - Computer Business Review (Site not responding. Last check: 2007-10-24)
		The method promotes the use of risk analysis techniques to gauge the level of risk associated with aspects such as the loss of image through web defacement, loss of income through downtime or denial of service attack, or the loss of credibility through the theft or misuse of confidential customer data.
		Different content needs to be scrutinised and risks managed in different ways because different business segments and departments in the same business sharing the same security infrastructure, can have very different appetites for risk.
		Software support is coming from the likes of SAS in the shape of its Risk Management for Banking suite which aims to provide an enterprise-wide view of an institution's risk exposure to balance necessary capital requirements against accurate calculations of credit, market and operational risk.
	www.cbronline.com /content/COMP/magazine/Articles/Security/000130.asp (2099 words)

	Estimating Risk Measures (Site not responding. Last check: 2007-10-24)
		Both of these have the attraction of being subadditive (unlike the VaR), and spectral risk measures also consider the user’s risk aversion: the more risk averse the user, the higher the resulting risk measure.
		The estimated risk measure is the sum of the fifth column terms.
		And if a risk measure is very imprecisely estimated, then the estimate is virtually worthless because its imprecision implies that the true value could be almost anything.
	www.fenews.com /fen43/risk-reward/risk-reward.htm (1449 words)

	Fool.com: Beat Risk -- and the Market [Commentary] May 22, 2003
		Today's article is the final installment of a two-part series on risk-averse investing in which I offer 15 guidelines to help individual investors reduce the risk of an equity portfolio while still achieving solid returns.
		I wrote recently about the risk inherent in development-stage biotech stocks.
		The "new economy" stocks have their egregious stock options, but "old economy" stocks often have a similar risk to shareholder wealth in the form of massive pension liabilities.
	www.fool.com /news/commentary/2003/commentary030522za.htm (1203 words)

	Fool.com: The Risk-Averse Investor [Commentary] May 21, 2003
		For most investors, the concepts of risk and reward are like two sides of the same coin.
		Also, keep in mind that there is a place in the market for investors who take on risk intelligently, the best of whom will be rewarded with returns that justify the assumed risk.
		On the opposite side of the risk spectrum, look for companies that have way more cash than they need to run their businesses -- such companies can withstand even the worst of economic storms, so long as their management doesn't do stupid things with the money.
	www.fool.com /news/commentary/2003/commentary030521za.htm (1152 words)

	Insurance - Voyager, the free encyclopedia (Site not responding. Last check: 2007-10-24)
		Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a reasonable fee and duty of care.
		In the event of a covered peril, the insurer pays the claimant the amount of loss according to the terms of the contract, in ordinary circumstances, which may amount to the cost of replacing or repairing the home.
		However, since most insurance companies consider it only prudent to invest in risk-free government bonds, or other lower risk and lower return forms of investments, it's important that the extra amount it has to pay out compared to what it has to take in is less than the percent return of these investments.
	www.voyager.in /Insurance (5273 words)

	UK Pension Plans More Risk Averse Than US Plans
		UK pension plan managers are becoming more risk averse than their US counterparts when it comes to investing in equities.
		Andrew Claringbold added: “Companies with pension plan assets that are less than a quarter of their market capitalisation are not significantly exposed to investment risk in their pension plan and are therefore more likely to look at an investment strategy that is geared towards having a higher proportion of equities.
		These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors.
	www.aon.com /uk/en/about/Press_Office/pension_risk_averse.jsp (997 words)

	Risk Averse Supervisors and the Efficiency of Collusion
		Antoine Faure-Grimaud, Jean-Jacques Laffont, and David Martimort (2002) "Risk Averse Supervisors and the Efficiency of Collusion", Contributions to Theoretical Economics: Vol.
		Building on Tirole (1986)'s results that deterring collusion with infinitely risk averse supervisors is impossible, while it is costless to do so under risk neutrality, we develop here a theory of collusion based on a trade-off between the risk premia required by (less extreme) risk attitudes and incentives.
		We are then able to derive implications for the design of organizations, like determining how the number of tasks/agents per supervisor or the level of competition may impact on the cost of collusion, studying the impact of vertical integration on those same costs, or characterizing the role of uncertainty on side-contracting.
	www.bepress.com /bejte/contributions/vol2/iss1/art5 (216 words)

	Female Entrepreneurs Win Notice for Taking Risk
		But advocates say a study showing their actually high tolerance of risk is helping to clear the air.
		Women's perceived unwillingness to take risk can be traced to a variety of published research on the attitudes of different cohorts of women--none of them female entrepreneurs-- toward risk.
		It found that women who want to substantially expand their businesses are willing to take the risks necessary to obtain financing and two-thirds of capital-seekers have been successful 100 percent of the time in previous efforts to obtain the growth capital they sought.
	www.womensenews.org /article.cfm/dyn/aid/2162 (894 words)

	[No title]
		This is because, for all returns between 2 and 8 percent, the height of the total utility curve exceeds the height of the expected utility chord and is therefore a risk averse investor.
		A risk neutral investor will be indifferent between a guaranteed return of 5 percent and investing in a risky IBM stock and expect a return of 5 percent.
		A risk loving investor will prefer investing in the risky IBM stock which generates a 5 percent expected return over the guaranteed 5 percent return because his height of the investor’s total utility, 150, is less that the height of the expected utility, 175.
	www.csun.edu /~hceco008/c21c-jn.doc (630 words)

	Publishing surgeons' performance may encourage risk averse behaviour (Site not responding. Last check: 2007-10-24)
		Differences in predicted mortality between surgeons were due to a small proportion of high risk patients.
		Crude comparisons of death rates are unfair and may encourage surgeons to practise risk averse behaviour, say the authors.
		Instead, they recommend a comparison of death rates based on low risk patients as the national benchmark for assessing consultant specific performance.
	www.eurekalert.org /pub_releases/2003-07/bmj-psp070203.php (237 words)

	risk-averse Definition
		Wanting to avoid risk unless adequately compensated for it; the attitude of most investors.
		For example, if two investments have the same expected return, the one with lower risk will be preferred.
		A riskier investment has to have a higher expected return in order to provide an incentive for a risk-averse investor to select it.
	www.investorwords.com /4295/risk_averse.html (148 words)

	Practice Questions
		Rationale: The more risk averse the investor, the less risk that is tolerated, given a rate of return.
		Since it offers no risk premium, it will not be acceptable to a risk-averse investor.
		First, a risky portfolio that pays a 12 percent rate of return with a probability of 50% or a 4 percent return with a probability of 50%, and second, a T-bill that pays 3 percent.
	www.sp.uconn.edu /~tsk01001/practice_questions.htm (1264 words)

	Theory of Risk Aversion
		We first turn to the concept of univariate "risk aversion" which, intuitively, implies that when facing choices with comparable returns, agents tend chose the less-risky alternative, a construction we owe largely to Milton Friedman and Leonard J. Savage (1948).
		In Figure 7, the risky asset y is represented by the chord connecting points A and B on the utility curve, and E[u(y)] is expected utility of asset y.
		The Arrow-Pratt risk-premium we paid to avoid the extra risk in state 1 is only a local risk-premium and is not a good measure of risk-aversion.
	cepa.newschool.edu /het/essays/uncert/aversion.htm (6248 words)

	Op-ed: Revival of Japan: Golden Efforts Belie Risk-Averse Image
		To do so would lock in the silver medal but avoid the risk of falling to third or worse, should the effort to be spectacular go bad, as it just had for the Romanians.
		The Japanese came next and, at this point, all that they needed to do to win the gold was to do what the Americans had done, turn in good performances that ran little risk of going bad.
		This response to incentives was clearest in the financial sector, where partial deregulation without threat of bank closures and the disappearance of banks' capital encouraged Japanese banks to evergreen bad loans rather than pursue new opportunities.
	www.iie.com /publications/papers/posen0804.htm (778 words)

	FuturePundit: Will Longer Lives Make People More Risk Averse?
		Aubrey takes his prediction of risk aversion to the point of predicting the end of high speed ground travel.
		I think that many people will become much less risk averse; if there is technology to prop up the human body and immune system well past the century mark, there is likely to be similar advances in rehabilitating injuries and damage caused by the types of acts were talking about (likely even brain repair).
		It's not that they loved their children any less, but (by necessity) they viewed the death of an infant as more to be expected, more part of the natural order of things, than we can really fathom.
	www.futurepundit.com /archives/001632.html (1035 words)

	The Hindu Business Line : Benchmark's Split Capital Fund Split between risk-averse and risk-seekers
		This type of risk-reward ratio is common for such contracts that are similar to risks faced by option writers.
		As retail investors cannot hedge their risks, it may not be appropriate for them to invest in Class B units.
		Institutional investors, who can hedge their risks, have already expressed willingness to invest in Class B units.
	www.thehindubusinessline.com /iw/2005/07/03/stories/2005070300531000.htm (558 words)

	Investment for risk-averse NRIs (Site not responding. Last check: 2007-10-24)
		utual funds and equities typically hold appeal for investors with an appetite for risk; however assured return instruments are likely to find favour with risk-averse investors.
		Even an investor with an appetite for risk can consider investing in fixed deposits to hold a complete and well-diversified portfolio across asset classes.
		Remittances received in any other currency can be converted into the designated currencies by the authorised dealer at the depositor's risk and cost.
	us.rediff.com /money/2005/jan/07nri2.htm (1034 words)

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