Asset Selection and Risk Management of Lender–Savers

Xingyun Peng

Chapter 5 in Financial Theory:Perspectives from China, 2015, pp 91-112 from World Scientific Publishing Co. Pte. Ltd.

Abstract: After making the saving or consumption choice, people immediately have to make the second choice — how to allocate savings among various assets. This is called asset selection. In asset selection, people often face the uncertainty of losses which is called risk. Uncertainty has a great impact on people's selection. If people can completely predict or determine the future, they will face fewer options in fact. Although uncertainty brings many pains in that people have to make hard choices, it cannot be avoided in most cases. This chapter mainly introduces the types of assets and the factors that people should consider when they choose an asset for investment. In addition, it will also introduce the nature of risk and methods of risk management.

Keywords: Monetary Economics; Financial Markets; Monetary Policy; Financial System; Financial Development (search for similar items in EconPapers)
Date: 2015
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