Subjective and Objective Risk Tolerance
Download or Read eBook Subjective and Objective Risk Tolerance PDF written by Sherman D. Hanna and published by . This book was released on 1998 with total page 10 pages. Available in PDF, EPUB and Kindle.
Author | : Sherman D. Hanna |
Publisher | : |
Total Pages | : 10 |
Release | : 1998 |
ISBN-10 | : OCLC:1290407560 |
ISBN-13 | : |
Rating | : 4/5 (60 Downloads) |
Book Synopsis Subjective and Objective Risk Tolerance by : Sherman D. Hanna
Book excerpt: The distinction between subjective and objective risk tolerance is illustrated by expected utility analyses of portfolios. Optimal portfolios were derived for one, 5, and 20 year investment horizons for 6 major financial asset categories. The important aspects of objective risk tolerance are the proportion of an investor's total wealth (including human wealth) in financial assets, and the investment horizon. Even investors with very low subjective risk tolerance levels should have aggressive portfolios if their horizons are 20 years or more.