On the linkage between financial risk tolerance and risk aversion
Faff, Robert and Mulino, D and Chai, D (2008) On the linkage between financial risk tolerance and risk aversion. Journal of Financial Research, 31 (1). pp. 1-23. ISSN 0270-2592
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We explore the linkage between financial risk tolerance (FRT) and risk aversion. To do this, we obtain FRT scores from a psychometrically validated survey and conduct a battery of online lottery choice experiments involving the same nonstudent participants. We contrast: real and hypothetical payoffs, low and high stakes, decisions involving gains and losses, and order effects. Our key finding is that the two approaches to analyzing decision making under uncertainty are strongly aligned. We present evidence that this is particularly the case for the female participants in our sample and when high-stake gambles are employed.
Creators(s): | Faff, Robert, Mulino, D and Chai, D; | Item type: | Article |
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ID code: | 41061 |
Keywords: | linkage, financial risk , tolerance , risk aversion, FRT, online lottery choice experiments , high-stake gambles , Accounting, Finance, Accounting |
Subjects: | Social Sciences > Commerce > Accounting |
Department: | Strathclyde Business School > Accounting and Finance |
Depositing user: | Pure Administrator |
Date deposited: | 10 Sep 2012 14:40 |
Last modified: | 01 Jan 2021 05:01 |
URI: | https://strathprints.strath.ac.uk/id/eprint/41061 |
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