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 the only new thing we have to offer is an improved version of the past, then today can only be inferior to yesterday. Hypnotised by images of the past, we risk losing all capacity for creative change.”
—Robert Hewison (b. 1943)
“I feel the carousel starting slowly
And going faster and faster: desk, papers, books,
Photographs of friends, the window and the trees
Merging in one neutral band that surrounds
Me on all sides, everywhere I look.”
—John Ashbery (b. 1927)