Portfolio risk - Q&A

Nick Bullman | CheckRisk | 26 October 2012

What has changed with respect to assessing investors as conservative, balanced, aggressive?

Risk is not constant. There is an economic function used in research called the Constant Relative Risk Aversion - CRRA. This assumes that an investor's risk tolerance is constant and unchanging. We think that this is a useful tool for modeling but unrealistic in the real world. We have developed a way with the University of Bath School of Management to ...