A PEEK AT THE TRADEOFF RELATIONSHIP BETWEEN EXPECTED RETURN AND RISK.
This article discusses a study which analyzed an investment problem under conditions of uncertainty. To judge the value of a contingent remainder, an investor should know something about the probability density function of present values associated with it. This study found that it is possible to fi...
| Published in: | Quarterly Journal of Economics Vol. 81; no. 3; pp. 437 - 457 |
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| Format: | Article |
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Oxford University Press / USA
Aug67
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | This article discusses a study which analyzed an investment problem under conditions of uncertainty. To judge the value of a contingent remainder, an investor should know something about the probability density function of present values associated with it. This study found that it is possible to find the probability density function and to compute from it the appropriate arguments for his preference function. In conclusion, it has been found that in a certain fairly special market, an asset with a return that is not certain sells at prices reflecting aversion to risk. |
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