The benefits of productive investment projects are difficult to ascertain due to the long-term nature of these investments.The risk-taking approaches of these investors are often ignored.This research examines the individual and combined effect of risk aversion and uncertainty on productive...

We provide evidence that growth options play an important role in determining the negative relation between corporate investment and idiosyncratic risk in the absence of agency problem. A simple real options model predicts that the negative relation between corporate investment and idiosyncratic...