Empirical evidence on risk aversion for individual romanian capital market investors
AbstractThe evolution of stock prices is influenced by the expectations of investors regarding the earning prospects associated to each listed company. One of the key elements of investment decision is the positive relationship between risk and return. Risky securities are preferred to less risky ones only if there is a higher pay-off in the long run that could compensate the investors. The previous studies proved that expected return direct correlated with risk and, due to the presence of risk aversion, this relationship is assumed to be positive one. Risk premium is determined by a lot of factors including risk aversion. The intensity of risk aversion and the evolution of it during a specific period of time are very important for any market. This study proposed an analysis of risk aversion that is based on a specific survey and it is very useful for comparative analysis with other similar studies developed on the case of other emerging markets (from EU or outside EU).
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Bibliographic InfoArticle provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Review of Economic and Business Studies.
Volume (Year): 1 (2008)
Issue (Month): (December)
risk aversion; individual investor; Romanian capital market;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Clifford B. Hawley & Edwin T. Fujii, 1994. "An Empirical Analysis of Preferences for Financial Risk: Further Evidence on the Friedman-Savage Model," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 16(2), pages 197-204, January.
- Kapteyn, A. & Teppa, F., 2002.
"Subjective Measures of Risk Aversion and Portfolio Choice,"
2002-11, Tilburg University, Center for Economic Research.
- Arie Kapteyn & Federica Teppa, 2002. "Subjective Measures of Risk Aversion and Portfolio Choice," Working Papers 02-03, RAND Corporation Publications Department.
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