What does risk aversion mean?
Definitions for risk aversion
risk aver·sion
This dictionary definitions page includes all the possible meanings, example usage and translations of the word risk aversion.
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Wikipedia
Risk aversion
In economics and finance, risk aversion is the tendency of people to prefer outcomes with low uncertainty to those outcomes with high uncertainty, even if the average outcome of the latter is equal to or higher in monetary value than the more certain outcome. Risk aversion explains the inclination to agree to a situation with a more predictable, but possibly lower payoff, rather than another situation with a highly unpredictable, but possibly higher payoff. For example, a risk-averse investor might choose to put their money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have high expected returns, but also involves a chance of losing value.
Wikidata
Risk aversion
Risk aversion is a concept in psychology, economics, and finance, based on the behavior of humans while exposed to uncertainty to attempt to reduce that uncertainty. Risk aversion is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, expected payoff. For example, a risk-averse investor might choose to put his or her money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have high expected returns, but also involves a chance of losing value.
Numerology
Chaldean Numerology
The numerical value of risk aversion in Chaldean Numerology is: 2
Pythagorean Numerology
The numerical value of risk aversion in Pythagorean Numerology is: 7
Examples of risk aversion in a Sentence
It remains to be seen if the yen can stay weak if global risk aversion takes hold again. Market players will be wary of the BOJ taking action in that case, but they may conclude that the central bank won't step in until dollar/yen falls into the 116 range, the BOJ can lower interest rates further into negative territory, but the impact could be limited. For example the ECB did deepen negative deposit rates in December but this was considered a disappointment.
The market was caught on the wrong foot as everyone expected talks were heading in the right direction and almost close to finishing, this was totally out of the blue and the reaction is that we have more risk aversion today.
There's absolutely nothing wrong with an individual who has a certain level of risk aversion, as we know the risk is extremely low of getting infected whether you're indoors or outdoors, but there are those people who don't want to take that bit of a risk, and there's nothing wrong with that, and they shouldn't be criticized.
Recent events surrounding U.S.-China ties threaten to raise new points of conflict beyond just trade differences, risk aversion shall continue being the de facto mode for global investors.
We need to be aware of risk aversion if geopolitical risks show signs of spreading, but it won't negatively impact the financial system if such risks are geographically contained.
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"risk aversion." Definitions.net. STANDS4 LLC, 2024. Web. 17 Nov. 2024. <https://www.definitions.net/definition/risk+aversion>.
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