Download or read book Risk Tolerance in Financial Decision Making written by C. Lucarelli and published by Springer. This book was released on 2010-12-03 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book sheds light on the emotional side of risk taking behaviour using an innovative cross-disciplinary approach, mixing financial competences with psychology and affective neuroscience. In doing so, it shows the implications for market participants and regulators in terms of transparency and communication between intermediaries and customers.

Download or read book Financial Risk Tolerance A Psychometric Review written by John E. Grable and published by CFA Institute Research Foundation. This book was released on 2017-06-30 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This content provides financial analysts, investment professionals, and financial planners with a review of how financial risk-tolerance tests can and should be evaluated. It begins by clarifying terms related to risk taking and is followed by a broad overview of two important measurement terms: validity and reliability. It concludes with examples for practice.

Download or read book Handbook of Consumer Finance Research written by Jing Jian Xiao and published by Springer. This book was released on 2016-05-30 with total page 376 pages. Available in PDF, EPUB and Kindle. Book excerpt: This second edition of the authoritative resource summarizes the state of consumer finance research across disciplines for expert findings on—and strategies for enhancing—consumers’ economic health. New and revised chapters offer current research insights into familiar concepts (retirement saving, bankruptcy, marriage and finance) as well as the latest findings in emerging areas, including healthcare costs, online shopping, financial therapy, and the neuroscience behind buyer behavior. The expanded coverage also reviews economic challenges of diverse populations such as ethnic groups, youth, older adults, and entrepreneurs, reflecting the ubiquity of monetary issues and concerns. Underlying all chapters is the increasing importance of financial literacy training and other large-scale interventions in an era of economic transition. Among the topics covered: Consumer financial capability and well-being. Advancing financial literacy education using a framework for evaluation. Financial coaching: defining an emerging field. Consumer finance of low-income families. Financial parenting: promoting financial self-reliance of young consumers. Financial sustainability and personal finance education. Accessibly written for researchers and practitioners, this Second Edition of the Handbook of Consumer Finance Research will interest professionals involved in improving consumers’ fiscal competence. It also makes a worthwhile text for graduate and advanced undergraduate courses in economics, family and consumer studies, and related fields.

Download or read book Risk Profiling and Tolerance Insights for the Private Wealth Manager written by Joachim Klement and published by CFA Institute Research Foundation. This book was released on 2018-05-01 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: If risk aversion and willingness to take on risk are driven by emotions and we as humans are bad at correctly identifying them, the finance profession has a serious challenge at hand—how to reliably identify the individual risk profile of a retail investor or high-net-worth individual. In this series of CFA Institute Research Foundation briefs, we have asked academics and practitioners to summarize the current state of knowledge about risk profiling in different key areas.

Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

Download or read book Risk Tolerance Time Preference and Financial Decision Making written by Ze'ev Shtudiner and published by . This book was released on 2019 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study analyzes the differences between salaried employees and self-employed people, in terms of risk tolerance, time preference, and choice of financial investment channels. Both groups completed research questionnaires designed to elicit responses relevant to these questions. Analysis of the results show that self-employed people have less risk aversion and a stronger future preference. These preferences are consistent with independent work, where the fruits of success can sometimes be harvested only after a long period of time, the risks are greater, and the level of uncertainty is higher. The subjects were also asked to choose investment channels for different amounts of money. Both self-employed people ‎and employees chose less risky investment channels as the amounts increased. However, the self-employed people ‎chose riskier investment channels than the employees. This decision-making tendency is clearly reflected in their choice of occupation, risk tolerance and time preference. This study can increase the self-employed people's awareness ‎of the characteristics that influence their financial decision-making. In addition, there is now a trend for investment advisors to focus on the psychological and demographic characteristics of clients when advising them regarding the composition of their investment portfolios. This study shows that the client's occupation can be an important factor that ought to influence composition of the portfolio, potentially improving client satisfaction.

Download or read book Risk Tolerance and Circumstances written by Elke U. Weber and published by CFA Institute Research Foundation. This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: An investor’s risk attitude is a stable characteristic, like a personality trait, but risk-taking behavior can change based on the investor’s age, recent market events, and life experiences. These factors change investors’ perceptions of the risks. Differences in risk tolerance between men and women or in different circumstances trace back to emotional as much as rational considerations. Financial advisers should consider all of these factors when advising clients and can use four simple steps to incorporate best practices: be aware, educate, nudge, and hand hold.

Download or read book Risk Profiling through a Behavioral Finance Lens written by Michael Pompian and published by CFA Institute Research Foundation. This book was released on 2016-03-03 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This piece examines risk profiling through a behavioral finance lens. Behavioral finance attempts to understand and explain actual investor behavior, in contrast to theorizing about investor behavior. It differs from traditional (or standard) finance, which is based on assumptions of how investors and markets should behave. Much has been written about the tension that exists between the willingness to take risk and the ability to take risk. Risk appetite is the willingness to take risk and risk capacity is the ability to take risk. In the behavioral context, risk appetite and risk capacity are defined in terms of known risks and unknown risks. Irrational client behavior often occurs when a client experiences unknown risks. To aid in the advisory process, advisors can use Behavioral Investor Types to help make rapid yet insightful assessments of what type of investor they are dealing with before recommending an investment plan. With a better understanding of behavioral finance vis-à-vis risk taking, practitioners can enhance their understanding of client preferences and better inform their recommendations of investment strategies and products.

Download or read book Financial Behavior written by H. Kent Baker and published by Oxford University Press. This book was released on 2017-05-02 with total page 608 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Behavior: Players, Services, Products, and Markets provides a synthesis of the theoretical and empirical literature on the financial behavior of major stakeholders, financial services, investment products, and financial markets. The book offers a different way of looking at financial and emotional well-being and processing beliefs, emotions, and behaviors related to money. The book provides important insights about cognitive and emotional biases that influence various financial decision-makers, services, products, and markets. With diverse concepts and topics, the book brings together noted scholars and practitioners so readers can gain an in-depth understanding about this topic from experts from around the world. In today's financial setting, the discipline of behavioral finance is an ever-changing area that continues to evolve at a rapid pace. This book takes readers through the core topics and issues as well as the latest trends, cutting-edge research developments, and real-world situations. Additionally, discussion of research on various cognitive and emotional issues is covered throughout the book. Thus, this volume covers a breadth of content from theoretical to practical, while attempting to offer a useful balance of detailed and user-friendly coverage. Those interested in a broad survey will benefit as will those searching for more in-depth presentations of specific areas within this field of study. As the seventh book in the Financial Markets and Investment Series, Financial Behavior: Players, Services, Products, and Markets offers a fresh looks at the fascinating area of financial behavior.

Download or read book Handbook of the Fundamentals of Financial Decision Making written by Leonard C. MacLean and published by World Scientific. This book was released on 2013 with total page 941 pages. Available in PDF, EPUB and Kindle. Book excerpt: This handbook in two parts covers key topics of the theory of financial decision making. Some of the papers discuss real applications or case studies as well. There are a number of new papers that have never been published before especially in Part II.Part I is concerned with Decision Making Under Uncertainty. This includes subsections on Arbitrage, Utility Theory, Risk Aversion and Static Portfolio Theory, and Stochastic Dominance. Part II is concerned with Dynamic Modeling that is the transition for static decision making to multiperiod decision making. The analysis starts with Risk Measures and then discusses Dynamic Portfolio Theory, Tactical Asset Allocation and Asset-Liability Management Using Utility and Goal Based Consumption-Investment Decision Models.A comprehensive set of problems both computational and review and mind expanding with many unsolved problems are in an accompanying problems book. The handbook plus the book of problems form a very strong set of materials for PhD and Masters courses both as the main or as supplementary text in finance theory, financial decision making and portfolio theory. For researchers, it is a valuable resource being an up to date treatment of topics in the classic books on these topics by Johnathan Ingersoll in 1988, and William Ziemba and Raymond Vickson in 1975 (updated 2 nd edition published in 2006).

Download or read book Behavioral Finance written by H. Kent Baker and published by Oxford University Press. This book was released on 2019-02-01 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: People tend to be penny wise and pound foolish and cry over spilt milk, even though we are taught to do neither. Focusing on the present at the expense of the future and basing decisions on lost value are two mistakes common to decision-making that are particularly costly in the world of finance. Behavioral Finance: What Everyone Needs to KnowR provides an overview of common shortcuts and mistakes people make in managing their finances. It covers the common cognitive biases or errors that occur when people are collecting, processing, and interpreting information. These include emotional biases and the influence of social factors, from culture to the behavior of one's peers. These effects vary during one's life, reflecting differences in due to age, experience, and gender. Among the questions to be addressed are: How did the financial crisis of 2007-2008 spur understanding human behavior? What are market anomalies and how do they relate to behavioral biases? What role does overconfidence play in financial decision- making? And how does getting older affect risk tolerance?

Download or read book Impact of Demographic Variables and Risk Tolerance on Investment Decisions written by Kavita Chavali and published by . This book was released on 2016 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: This empirical study explores the investment pattern and financial decision making of individuals and their risk tolerance. The study has adopted financial risk tolerance scale proposed by Grable and Lytton to measure the different dimensions of financial risk. Kendall's W test is used to ascertain the preferred source of investment of individuals. Chi-square test is used to determine the demographic variables and their relationship with investment pattern. The study reveals that gender has an impact on the investment pattern and decision making of respondents.

Download or read book Investment Risk Profiling written by Amy Hubble and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Investor Risk Profiling An Overview written by Joachim Klement and published by CFA Institute Research Foundation. This book was released on 2015-02-26 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The current standard process of risk profiling through questionnaires is highly unreliable and typically explains less than 15% of the variation in risky assets between investors—mostly because the questionnaires focus on socio-economic variables and hypothetical scenarios. The existing research in risk profiling shows, however, that several factors can provide more accurate and reliable insights into the risk profile of investors. Among these factors are the lifetime experiences an investor has had, the financial decisions made in the past, and the influence of family and friends as well as advisers. By using these factors, practitioners can get a better understanding of their clients’ preferences in order to recommend suitable investment strategies and products.

Download or read book Corporate Value of Enterprise Risk Management written by Sim Segal and published by John Wiley & Sons. This book was released on 2011-02-11 with total page 439 pages. Available in PDF, EPUB and Kindle. Book excerpt: The ultimate guide to maximizing shareholder value through ERM The first book to introduce an emerging approach synthesizing ERM and value-based management, Corporate Value of Enterprise Risk Management clarifies ERM as a strategic business management approach that enhances strategic planning and other decision-making processes. A hot topic in the wake of a series of corporate scandals as well as the financial crisis Looks at ERM as a way to deliver on the promise of balancing risk and return A practical guide for corporate Chief Risk Officers (CROs) and other business professionals seeking to successfully implement ERM ERM is here to stay. Sharing his unique insights and experiences as a recognized global thought leader in this field, author Sim Segal offers world-class guidance on how your business can successfully implement ERM to protect and increase shareholder value.

Download or read book Handbook of Research on New Challenges and Global Outlooks in Financial Risk Management written by Madaleno, Mara and published by IGI Global. This book was released on 2022-01-14 with total page 470 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risk affects many different companies, industries, and institutions, and the COVID-19 pandemic has caused more challenges than before to arise. In the wake of these new challenges, new risk management strategies must arise. Risk affects many companies differently, though in the aftermath of a global pandemic, similar management strategies may be adapted to maintain a flourishing business. Financial risk management has become increasingly important in the last years, and a profound understanding of this subject is vital. The Handbook of Research on New Challenges and Global Outlooks in Financial Risk Management discusses the financial instruments firms use to manage the difference kinds of financial risks and risk management practices in a variety of different countries. This book offers an international focus of risk management, comparing different practices from all over the world. Covering topics such as bank stability, environmental assets, and perceived risk theory, this book is a valuable research source for regulatory authorities, accountants, managers, academicians, students, researchers, graduate students, researchers, faculty, and practitioners.

Download or read book The Psychology of Saving written by Karl Erik W‹rneryd and published by Edward Elgar Publishing. This book was released on 1999-01-01 with total page 406 pages. Available in PDF, EPUB and Kindle. Book excerpt: Some people save and others with similar incomes and wealth do not. Why? Whilst psychology has devoted little attention to the forward looking dimension of human behavior, it contributes theories and techniques for studying the cognitive, motivational, and social factors that affect saving. The book examines the assumption that man is forward looking and desires to provide for the future. It summarizes theories and behavioral research in the area of saving and explores the psychological insights and findings of economists and interprets them in terms of modern psychology. The Psychology of Saving will be welcomed as a major contribution to economic psychology which brings together research and analysis, developing our understanding about rationality, expectations, and consumer behavior.