How Risky is Risk
“How Risky is Risk”
1. Introduction
‘’The human understanding, once it has adopted an opinion , collects any instance that confirm it, and though the contrary instances may be more numerous and more weightly, it either does not notice them or else rejects them, in order that this opinion will remain unshaken.’’ Francis Bacon, 1620.
Risk is a very interesting thing; people normally tend not to realize the real effect that risk takes in their lives. There are many kinds of risk, we want to focus on studying the financial risk, the perception of it, the effect that it has on the private banking’s behavior, their clients, and how they should be treated, the effect that it has on decision making, and the effect that it has o behavioral finance. Because when you start talking about behavioral finance you need to try to understand what risk represents and all of the effects it has.
During this article we want to show why over 10% return margins shouldn’t be viewed as something risky, but as something worth analyzing. Because in this times people are going to need over 10% margins if they still want to be making profits out of their investments.
And once people understand what risk represents, what it represents and all of its effects, they can start analyzing what they want and need out of their investments. And once they understand that, they are going to do anything to accomplish it, because as it is said in the quote at the beginning once the human understanding acquires a goal and an opinion on how to get to the goal, he will do anything to end up successfully.
2. Risk
Risk by definition, is the potential of gaining something of value, weighed against losing something of value but, The term “risk”, means financial risk or uncertainty of financial loss’’ (Raghavan, 2003). After using these terms for the purpose of this paper we will divide the study of risk into 3 parts: types of financial risk, the ways to measure ir and perception of risk.
2.1 Types of
1. Introduction
‘’The human understanding, once it has adopted an opinion , collects any instance that confirm it, and though the contrary instances may be more numerous and more weightly, it either does not notice them or else rejects them, in order that this opinion will remain unshaken.’’ Francis Bacon, 1620.
Risk is a very interesting thing; people normally tend not to realize the real effect that risk takes in their lives. There are many kinds of risk, we want to focus on studying the financial risk, the perception of it, the effect that it has on the private banking’s behavior, their clients, and how they should be treated, the effect that it has on decision making, and the effect that it has o behavioral finance. Because when you start talking about behavioral finance you need to try to understand what risk represents and all of the effects it has.
During this article we want to show why over 10% return margins shouldn’t be viewed as something risky, but as something worth analyzing. Because in this times people are going to need over 10% margins if they still want to be making profits out of their investments.
And once people understand what risk represents, what it represents and all of its effects, they can start analyzing what they want and need out of their investments. And once they understand that, they are going to do anything to accomplish it, because as it is said in the quote at the beginning once the human understanding acquires a goal and an opinion on how to get to the goal, he will do anything to end up successfully.
2. Risk
Risk by definition, is the potential of gaining something of value, weighed against losing something of value but, The term “risk”, means financial risk or uncertainty of financial loss’’ (Raghavan, 2003). After using these terms for the purpose of this paper we will divide the study of risk into 3 parts: types of financial risk, the ways to measure ir and perception of risk.
2.1 Types of
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