منابع مشابه
Risk Aversion and Rationality
0 Introduction Ralph has the opportunity to participate in two gambles. In the first, a referee will flip a coin, and if it lands heads, Ralph will receive a towel that Elvis once wiped his face on (Ralph is a big Elvis fan). In the second, the referee will flip a different coin, and if it lands tails, Ralph will receive a pair of gloves. Ralph believes both coins to be fair. Now a trickster co...
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When there is uncertainty about interest rates (typically due to either illiquidity or defaultability of zero coupon bonds) the cash-additivity assumption on risk measures becomes problematic. When this assumption is weakened, to cash-subadditivity for example, the equivalence between convexity and the diversi cation principle no longer holds. In fact, this principle only implies (and it is imp...
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There are different concepts of rationality: specific rationality, normative rationality and instrumental rationality whose limitation covers the holistic rationality and represents the fate of rationality in the West. Thus following Hume reason became the slave of feelings and lost its authority for choosing the goal. In Islamic culture reason with its undeniable background in Shariah enjoy...
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The Net Present Value maximizing model has a respectable ancestry and is considered by most scholars a theoretically sound decision model. In real-life applications, decision makers use the NPV rule, but apply a subjectively determined hurdle rate, as opposed to the “correct” opportunity cost of capital. According to a heuristics-and-biases-program approach, this implies that the hurdle-rate ru...
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ion versus naturalism Much of the evidence for and against SEU and other candidate models is gleaned from controlled laboratory-based experiments. But it is not at all clear that the laboratory is the best environment in which to determine people’s responses to risk. At issue are the kinds of situations used to develop and test hypotheses and, specifically, the degree of abstraction/naturalism ...
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ژورنال
عنوان ژورنال: Journal of Financial Risk Management
سال: 2019
ISSN: 2167-9533,2167-9541
DOI: 10.4236/jfrm.2019.84021