Communicating Asset Risk : how the format of historic volatility information affects risk perception and investment decisions


Siebenmorgen, Niklas ; Weber, Elke U. ; Weber, Martin


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URL: https://ub-madoc.bib.uni-mannheim.de/279
URN: urn:nbn:de:bsz:180-madoc-2792
Document Type: Working paper
Year of publication: 2001
Place of publication: Mannheim
Publication language: English
Institution: Business School > ABWL u. Finanzwirtschaft, insbes. Bankbetriebslehre (Weber -2017)
Subject: 330 Economics
Subject headings (SWD): Wertpapier , Risikoanalyse
Abstract: Questions about the perception and proper communication of risk are of increasing theoretical and practical interest. An experiment examined how the type and presentation format of information about investment options affected the expectations held by investors about asset risk, returns, and volatility. Some respondents were provided with the names of investment options in addition to historical (1987-97) volatility data, and some were not. Historical volatility was presented either as a bar graph of returns per year or as a continuous density distribution of returns over the 10-year period. Risk and volatility perceptions both varied significantly as a function of type and format of information, but in different ways. Biases in risk perception, but not in volatility forecasts, affected portfolio decisions.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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Siebenmorgen, Niklas ; Weber, Elke U. ; Weber, Martin (2001) Communicating Asset Risk : how the format of historic volatility information affects risk perception and investment decisions. Open Access Mannheim [Working paper]
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