Risk neutral is a concept used in both game theory studies and in finance. It refers to a mindset where an individual is indifferent to risk when making an investment decision. This mindset is not derived from calculation or rational deduction, but rather from an emotional preference. A person with a risk-neutral approach simply doesn’t focus on the risk–regardless of whether or not that is an ill-advised thing to do. This mindset is often situational and can be dependent on price or other external factors.
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