West Loop Financial LLCInvestors Pay Premiums For Bad Bets – West Loop Financial LLC https://www.westloopfinancial.com Evolutionize Site Wed, 19 Aug 2020 20:50:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Investors Pay Premiums For Bad Bets https://www.westloopfinancial.com/2015/06/22/investors-pay-premiums-for-bad-bets/ https://www.westloopfinancial.com/2015/06/22/investors-pay-premiums-for-bad-bets/#respond Mon, 22 Jun 2015 09:00:56 +0000 http://evolvemypractice.com/?p=2032 The first formal asset pricing model—the capital asset pricing model—was built on certain assumptions, including that investors are risk-averse; will maximize the expected utility of absolute wealth; and care only about the mean and variance of return. However, academic research has found that these assumptions don’t necessarily hold. In the real world, some investors have...

The post Investors Pay Premiums For Bad Bets appeared first on West Loop Financial LLC.

]]> The first formal asset pricing model—the capital asset pricing model—was built on certain assumptions, including that investors are risk-averse; will maximize the expected utility of absolute wealth; and care only about the mean and variance of return.

However, academic research has found that these assumptions don’t necessarily hold. In the real world, some investors have a “taste,” or preference, for lotterylike investments—investments that exhibit positive skewness and excess kurtosis.

Read the rest of the article on ETF.com.

The post Investors Pay Premiums For Bad Bets appeared first on West Loop Financial LLC.

]]> https://www.westloopfinancial.com/2015/06/22/investors-pay-premiums-for-bad-bets/feed/ 0