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 Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Risk aversion. Risk-averse investors dislike risk and require higher rates of return as an inducement to buy riskier securities.
