What Are Risk-Neutral Probabilities? Risk-neutral probabilities are probabilities of potential future outcomes adjusted for risk, which are then used to compute expected asset values. In other words, ...

Investors differ in how they approach risk, and these approaches influence their decision-making and portfolio strategies.

Let’s continue our exploration of risk by taking a peak at the so-called risk-neutral businesses. Unlike the risk-averse companies we discussed in the first part of this series, this class of ...

The objective of this paper is to investigate and compare the relationship between risk-neutral and risk-averse newsvendor problems under three different decision criteria: expected utility (EU) ...

Meagan is a former Series 7 financial advisor and current writer focused on blending straightforward information with a dose of humor on topics including equity investments, insurance products, and ...

A market-neutral fund neutralizes exposure to the movements of the stock market. Returns are generated from outperformance and underperformance relative to the market. This is achieved by going long ...