Risk aversion and Risk premium

Shortcuts: Differences, Similarities, Jaccard Similarity Coefficient, References.

Difference between Risk aversion and Risk premium

Risk aversion vs. Risk premium

In economics and finance, risk aversion is the behavior of humans (especially consumers and investors), when exposed to uncertainty, in attempting to lower that uncertainty. For an individual, a risk premium is the minimum amount of money by which the expected return on a risky asset must exceed the known return on a risk-free asset in order to induce an individual to hold the risky asset rather than the risk-free asset.

Similarities between Risk aversion and Risk premium

Risk aversion and Risk premium have 5 things in common (in Unionpedia): Equity premium puzzle, Expected utility hypothesis, Finance, Risk neutral preferences, Risk-seeking.

Equity premium puzzle

The equity premium puzzle refers to the inability of an important class of economic models to explain the average premium of a well-diversified U.S. equity portfolio over U.S. Treasury Bills observed for more than 100 years.

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Expected utility hypothesis

In economics, game theory, and decision theory the expected utility hypothesis, concerning people's preferences with regard to choices that have uncertain outcomes (gambles), states that if specific axioms are satisfied, the subjective value associated with an individual's gamble is the statistical expectation of that individual's valuations of the outcomes of that gamble.

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Finance

Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty.

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Risk neutral preferences

In economics and finance, risk neutral preferences are preferences that are neither risk averse nor risk seeking.

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Risk-seeking

In economics and finance, a risk-seeker or risk-lover is a person who has a preference for risk.

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The list above answers the following questions

What Risk aversion and Risk premium have in common
What are the similarities between Risk aversion and Risk premium

Risk aversion and Risk premium Comparison

Risk aversion has 78 relations, while Risk premium has 24. As they have in common 5, the Jaccard index is 4.90% = 5 / (78 + 24).

References

This article shows the relationship between Risk aversion and Risk premium. To access each article from which the information was extracted, please visit:

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