In economics and finance, risk neutral behavior is between risk aversion and risk seeking. If offered either €50 or a 50% chance of each of €100 and nothing, a risk neutral person would have no preference between the two options. In contrast, a risk averse person presented with these options would accept some amount less than €50 in preference to the risky option, while a risk seeking person would accept a less than 50% chance of €100 in preference to the sure €50.
Read more about Risk Neutral: Theory of The Firm, Portfolio Theory, The Risk Neutral Utility Function
Famous quotes containing the words risk and/or neutral:
“Kemmerick: He’s dead. He’s dead.
Katczinsky: Why did you risk your life bringing him in?
Kemmerick: But it’s Behm. My friend.
Katczinsky: It’s a corpse, no matter who it is.”
—Maxwell Anderson (1888–1959)
“The lonely Earth amid the balls
That hurry through the eternal halls,
A makeweight flying to the void,
Supplemental asteroid,
Or compensatory spark,
Shoots across the neutral Dark.”
—Ralph Waldo Emerson (1803–1882)