投资学 6 Risk and Risk Aversion教学幻灯片.pptVIP

Risk and Risk Aversion;LEARNING OBJECTIVES;Definitions of risk ;Definitions of risk-In finance ;Definitions of risk-In finance;W = 100;;Risk aversion;Risk aversion -Example ;Investor’s view of risk Risk Averse:A risk averse investor will demand compensation for uncertainty or risk. Risk Neutral:A risk neutral investor will be willing to accept a fair bet or would be willing to analyze investments in terms of expected value. Risk Seeking:A risk seeking investor will take an unfair bet, that is, would be willing to take on an uncertain investment that has a lower expected value for the chance of securing a large profit. ;Utility ;Cardinal and ordinal utility ;Utility functions ;Risk Aversion Utility;What’s Your Risk Tolerance?;Risk Aversion and Value: Using the Sample Investment;Risk Aversion and Value: Using the Sample Investment;Dominance Principle;Utility and Indifference Curves;Indifference Curves;Expected Return;Variance of Return;Return on a Portfolio;Portfolio Risk with Risk-Free Asset;Rule 5: When two risky assets with variances s12 and s22, respectively, are combined into a portfolio with portfolio weights w1 and w2, respectively, the portfolio variance is given by: ?p2 = w12?12 + w22?22 + 2W1W2 Cov(r1r2) Cov(r1r2) = Covariance of returns for Security 1 and Security 2