In economics and finance, risk neutral behavior is between risk aversion and risk seeking. If offered either €50 or a 50% chance of each of €100 and nothing, a risk neutral person would have no preference between the two options. In contrast, a risk averse person presented with these options would accept some amount less than €50 in preference to the risky option, while a risk seeking person would accept a less than 50% chance of €100 in preference to the sure €50.
Read more about Risk Neutral: Theory of The Firm, Portfolio Theory, The Risk Neutral Utility Function
Famous quotes containing the words risk and/or neutral:
“If you think it will only add one sprig to the wreath the country twines to bind the brows of my hero, I will run the risk of being sneered at by those who criticize female productions of all kinds. ...Though a female, I was born a patriot.”
—Annie Boudinot Stockton (1736–1801)
“The seashore is a sort of neutral ground, a most advantageous point from which to contemplate this world. It is even a trivial place. The waves forever rolling to the land are too far-traveled and untamable to be familiar. Creeping along the endless beach amid the sun-squall and the foam, it occurs to us that we, too, are the product of sea-slime.”
—Henry David Thoreau (1817–1862)