Investors exhibit three fundamental risk preference behaviours; risk aversion, risk in difference, and risk seeking
To analyze the risk preference behaviors of retail investors, we can consider two hypothetical investors, Investor A and Investor B, representing different risk preferences. Investor A: Risk-Averse Characteristics: Investing Strategy: Example: Investor A may invest heavily in a diversified bond fund, preferring the predictable returns and lower risk of bonds over the potential high returns… Read More »Investors exhibit three fundamental risk preference behaviours; risk aversion, risk in difference, and risk seeking