Decision Sciences
4 years ago

New study simplifies understanding of downside risk aversion in investments.

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RePEc: Research Papers in Economics
A note on greater downside risk aversion
Richard Watt

Paper Summary

The article explains how to understand and simplify downside risk aversion. It shows how to measure greater downside risk aversion using the prudence probability premium. The researchers also look at how downside risk aversion changes with risk-free wealth.

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