The topic of risk incorporates a variety of definitions within different fields such as psychology, sociology, finance, and engineering. In academic finance, the analysis of risk has two major perspectives known as standard (traditional) finance and behavioral finance. The central focus of...

This chapter provides an overview of the research literature and the important issues regarding risk perception and risk tolerance. The academic literature reveals that various disciplines provide an assortment of perspectives in terms of how to define, describe, and analyze risk. The behavioral...

Tax risk has the potential to have far-reaching economic consequences, including the effect on late audit reports. This study aims to empirically investigate the effect of tax risk on audit report lag. This study took a quantitative approach. Companies listed on the Indonesia Stock Exchange...

Stocks with high idiosyncratic volatility perform poorly relative to low idiosyncratic volatility stocks. We offer a novel explanation of this anomaly based on real options, which is consistent with earlier findings on idiosyncratic volatility (the positive contemporaneous relation between...

If two investments have the same payoff covariance with the market but one has higher expected payoff, which asset according to the CAPM has most risk? One answer is that as far as risk goes the two assets are the same, because they have the same covariance with the market. The correct answer,...

This paper refines the framework proposed by Beal et al (2005) and by applying Tobin's Liquidity Preference Theory (Tobin, 1958) to describe individual attitudes toward risk, and identifies a number of SRI investor profiles based on their attitude to risk

We show theoretically that when Bayesian investors face time-series uncertainty about assets' risk exposures, differences in their priors affect the pricing of risk in the cross-section: different priors for the same asset can generate differences in perceived risk exposures, and thereby...

Marketers and investors face a heated, provocative debate over whether excelling in social responsibility initiatives hurts or benefits firms financially. This study develops a theoretical framework that predicts (1) the impact of corporate social performance (CSP) on firm-idiosyncratic risk and...

Although managers are interested in the financial value of customers and researchers have pointed out the importance of stock analysts who advise investors, no studies to date have explored the implications of customer satisfaction for analyst stock recommendations. Using a large-scale...

Nearly a century ago, Frank Knight famously distinguished between risk and uncertainty with respect to the nature of decisions made in a business enterprise. He associated generating economic profit with making entrepreneurial decisions in the face of fundamental uncertainties. This uncertainty...