Overview

risk taking


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Engaging in any risky activity when a safer alternative was available. This applies to many situations, for example trading on one's own account rather than working for an employer, making unsecured loans rather than secured ones, betting, or failing to insure one's home. Even risk-averse individuals are prepared to take many risks: they would prefer a safer alternative if the mean expected return were the same, but believe that the risky alternative offers a higher return than the safe one.

Subjects: Economics.


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