We infer which risk model investors use by looking at their capital allocation decisions. We find that investors adjust … for risk using the beta of the Capital Asset Pricing Model (CAPM). Extensions to the CAPM perform poorly, implying that … they do not help explain how investors measure risk …

This paper investigates how the nature of risk changes as investment horizon lengthens, and what it means for investors … equities, bonds and cash may vary with horizon is also discussed, including highlighting why fixed income may not be a low risk …

too quickly. However, some studies argue that investors tend to be risk-averse in the area of unrealized capital losses …. Our findings suggest that investors have a risk-averse propensity for highly illiquid assets in unrealized loss areas and …