Understanding Financial Risk Tolerance
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Understanding Financial Risk Tolerance
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Author : Caterina Cruciani
language : en
Publisher: Springer Nature
Release Date : 2022-09-27
Understanding Financial Risk Tolerance written by Caterina Cruciani and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-09-27 with Business & Economics categories.
This book revolves around the concept of financial risk tolerance and its role in financial markets. Bridging different literatures and reviewing in detail the impact of European regulation on the evolution of risk tolerance assessment, this book discusses the intersection of scholarly research, practitioner experience and current and likely normative developments. In particular, the book focuses on the evolution of the debate on the suitability questionnaire – a key tool introduced with the Markets in Financial Instruments Directive (MiFID) and further developed with MiFID’s successor - comparing it with empirical evidence on financial risk tolerance determinants, spanning from sociodemographic to behavioral components and life events. The book also looks at the future evolution of the normative framework post MiFID2 addressing in detail two key trends that are already affecting the way in which risk tolerance is dealt with in European financial markets – sustainable development and fintech and roboadvisory. The book includes an original survey run with financial market experts to assess the perceptions regarding these two trends and includes commentaries by a professional financial advisor on the key topics discussed.
Risk Profiling Through A Behavioral Finance Lens
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Author : Michael Pompian
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2016-03-03
Risk Profiling Through A Behavioral Finance Lens written by Michael Pompian and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-03 with Business & Economics categories.
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.
Practical Risk Management
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Author : Erik Banks
language : en
Publisher: John Wiley & Sons
Release Date : 2004-02-04
Practical Risk Management written by Erik Banks and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-02-04 with Business & Economics categories.
A proven way to manage risk in today's business world Understanding how the risk process works is a critical concept that business professionals must come to learn. For those who must understand the fundamentals of risk management quickly, without getting caught up in jargon, theory, mathematics, and formulas, Practical Risk Management is the perfect read. Written in a clear, fast-paced and easily digestible style, this book explains the practical challenges associated with risk management and how-by focusing on accountability, governance, risk appetite, liquidity, client risks, automated and manual processes, tools and diagnostics-they can be overcome. After finishing this book, readers will have a solid understanding of the risk process, know which issues/questions are of critical importance, and be able to determine how their specific risk problems can be minimized or avoided. Erik Banks (Redding, CT) is currently Chief Risk Officer for Element Re. Prior to that he spent several years at Merrill Lynch in market/credit risk management roles in London, Tokyo, Hong Kong, and the United States. He is also adjunct Professor of Finance at the University of Connecticut, where he teaches MBA students. Richard Dunn (London, UK) works for Merrill Lynch. He single-handedly restructured Merrill Lynch's risk function post in 1998 into its current form.
Financial Risk Tolerance A Psychometric Review
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Author : John E. Grable
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2017-06-30
Financial Risk Tolerance A Psychometric Review written by John E. Grable and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-30 with Business & Economics categories.
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.
Investor Risk Profiling An Overview
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Author : Joachim Klement
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2015-02-26
Investor Risk Profiling An Overview written by Joachim Klement and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-02-26 with Business & Economics categories.
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.
Financial Risk Tolerance
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Author : John E. Grable
language : en
Publisher:
Release Date : 2017
Financial Risk Tolerance written by John E. Grable and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
Risk Profiling And Tolerance Insights For The Private Wealth Manager
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Author : Joachim Klement
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2018-05-01
Risk Profiling And Tolerance Insights For The Private Wealth Manager written by Joachim Klement and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-01 with Business & Economics categories.
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.
Risk Tolerance And Circumstances
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Author : Elke U. Weber
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2018
Risk Tolerance And Circumstances written by Elke U. Weber and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Business & Economics categories.
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.
Handbook Of Consumer Finance Research
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Author : Jing Jian Xiao
language : en
Publisher: Springer
Release Date : 2016-05-30
Handbook Of Consumer Finance Research written by Jing Jian Xiao and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-05-30 with Psychology categories.
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.
Risk Tolerance In Financial Decision Making
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Author : C. Lucarelli
language : en
Publisher: Springer
Release Date : 2010-12-03
Risk Tolerance In Financial Decision Making written by C. Lucarelli and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-12-03 with Business & Economics categories.
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.