Standard Risk Aversion and the Demand for Risky Assets in the Presence of Background Risk

dc.contributor.authorFranke, Günter
dc.contributor.authorStapleton, Richard C.deu
dc.contributor.authorSubrahmanyam, Marti G.deu
dc.date.accessioned2011-03-25T09:43:27Zdeu
dc.date.available2011-03-25T09:43:27Zdeu
dc.date.issued2000deu
dc.description.abstractWe consider the demand for state contingent claims in the presence of a zero-mean, nonhedgeable background risk. An agent is defined to be generalized risk averse if he/she reacts to an increase in background risk by choosing a demand function for contingent claims with a smaller slope. We show that the conditions for standard risk aversion: positive, declining absolute risk aversion and prudence are necessary and sufficient for generalized risk aversion. We also derive anecessary and sufficient condition for the agent's derived risk aversion to increase with a simple increase in background risk.eng
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dc.identifier.ppn089891422deu
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dc.language.isoengdeu
dc.legacy.dateIssued2001deu
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dc.subject.ddc330deu
dc.titleStandard Risk Aversion and the Demand for Risky Assets in the Presence of Background Riskeng
dc.typeWORKINGPAPERdeu
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kops.citation.bibtex
@techreport{Franke2000Stand-12204,
  year={2000},
  series={CoFE-Diskussionspapiere / Zentrum für Finanzen und Ökonometrie},
  title={Standard Risk Aversion and the Demand for Risky Assets in the Presence of Background Risk},
  number={2000/36},
  author={Franke, Günter and Stapleton, Richard C. and Subrahmanyam, Marti G.}
}
kops.citation.iso690FRANKE, Günter, Richard C. STAPLETON, Marti G. SUBRAHMANYAM, 2000. Standard Risk Aversion and the Demand for Risky Assets in the Presence of Background Riskdeu
kops.citation.iso690FRANKE, Günter, Richard C. STAPLETON, Marti G. SUBRAHMANYAM, 2000. Standard Risk Aversion and the Demand for Risky Assets in the Presence of Background Riskeng
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