(Risk in Decision Making: Some Particular Case) Abstract

(Risk in Decision Making: Some Particular Case)

Abstract:

In financial decision–making, risk is always given a negative consideration: riskier investments should yield higher returns, we hear experts say. And they are right. But there are particular cases in which the risk of a decision is not so detrimental, because it offers situations that always outweigh the starting position.

In this paper, we offer cases in which this occurs and provide a suggestive analysis. We intend, above all, to alert the reader not to have such a negative view of risk. Risk
is variability, and it varies a lot from winning 100 to 100,000, but if I always win, that risk does not seem so bad.

Keywords: Risk, risk averse, risk in positive, operating leverage, financial leverage.