Risk, Return and Risk Aversion: A Behavioral Rendition

• Main Author: Ting, Hian Ann, Christopher
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2338; https://ink.library.smu.edu.sg/context/lkcsb_research/article/3337/viewcontent/2204paper_ghmom.pdf
• Institution: Singapore Management University

Behavioral finance and classical finance based on utility maximization appear to be mutually exclusive schools of thought. Despite the fundamental difference, we show that behavioral finance also has a linear relation between risk and return. This relation is obtained without the assumptions of mark...