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Risk Averse

 

Describes an investor who, when faced with two investments with a similar expected return (but different risks), will prefer the one with the lower risk.

Investopedia Says:
A risk averse person dislikes risk.

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Term referring to the assumption that, given the same return and different risk alternatives, a rational investor will seek the security offering the least risk-or, put another way, the higher the degree of risk, the greater the return that a rational investor will demand. See also Behavioral Finance (or Investing) Capital Asset Pricing Model; Efficient Portfolio; Mean Return; Portfolio Theory.

 
 

 

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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more