Financial advisors need to assess their clients’ risk profile to properly manage their portfolio risk and comply with … regulatory provisions. Assessing an investor’s financial risk tolerance (FRT) is a challenge in the advisory process and none of … financial advisors looking to improve their customers’ risk profiling …

An empirical puzzle in financial markets, known as the low-risk anomaly, is that riskier assets earn lower risk …-traditional preferences for lottery-like payoffs. We relate the low risk anomaly to the Favorite-Longshot Bias in betting markets, where … theories of risk-averse investors with homogeneous beliefs cannot explain the cross-sectional relationship between …

an increase in ambiguity is associated with increased investor activity. It also leads to a reduction in risk …