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- Barasinska, Nataliya, et al.
(author)
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Individual risk attitudes and the composition of financial portfolios : Evidence from German household portfolios
- 2012
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In: Quarterly Review of Economics and Finance. - : Elsevier. - 1062-9769 .- 1878-4259. ; 52:1, s. 1-14
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Journal article (peer-reviewed)abstract
- This paper explores the relationship between the self-declared risk aversion of private investors and theirpropensity to hold incomplete portfolios of financial assets. The analysis is based on household surveydata from the German Socioeconomic Panel (SOEP) that provides a reliable measure of individual attitudestoward financial risk. Our findings suggest that more risk averse households tend to hold incompleteportfolios consisting mainly of a few risk-free assets. We also find that the propensity to acquire additionalassets is highly dependent on whether liquidity and safety needs are met.
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