Risk aversion is a fundamental trait shaping how individuals, firms and policymakers respond to uncertain outcomes. It encapsulates the preference for certain outcomes over gambles with equivalent ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J. Brock is a CFA and CPA with more ...

What Is a Risk Graph? A risk graph, also known as a profit graph, is a two-dimensional graphical representation that displays the range of profit or loss possibilities for an options trade. A risk ...

The idea of loss aversion—that, to an irrational degree, individuals avoid losses more than they pursue gains—has been influential in the field of behavioral finance. It has been imputed to drive ...