Illustrating Attitudes Toward Risk
This classroom exercise is designed to illustrate the concept of risk aversion through a series of four short questionnaires. Students indicate their preferences in a variety of situations constructed to uncover a particular aspect of their tolerance for risk. By comparing students’ choices across varying payoffs, probabilities, bet structures and initial endowments, the exercises contribute to an understanding of the complexity of personal preferences and attitudes toward risk and the impact on financial decision-making.
Ambrose, Jan, "Illustrating Attitudes Toward Risk" (2016). Department of Finance. 31.