The Impact of Financial Crisis on Investors’ Risk Aversion. Evidence on Romanian Capital Market

Cristian Paun

Revista OEconomica, 2010, issue 01

Abstract:

The dynamic of financial markets is determined by the corporate earnings prospects change but the capital investments also move as investors shift their tolerance to risk. In the finance theory, one of the most important observations is that investors expect higher return for taking higher risk (compared with risk-free situation). The risky assets are exchanged against risk free assets (treasury bills) only if there is an additional return for doing this. The relationship between risk and return is submitted to be a positive one.

Keywords: risk aversion; individual investor; capital market (search for similar items in EconPapers)
JEL-codes: D53 G11 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:oen:econom:y:2010:i:01:id:228

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