A Note on Risk Acceptance, Bankruptcy Avoidance and Riskiness Measures
Chamorro Elosua, Arritokieta
Usategui Díaz de Otalora, José María
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In this work we clarify the relationships between riskiness, risk acceptance and bankruptcy avoidance. We distinguish between the restriction on the current wealth required to make a gamble acceptable to the decision maker and the restriction on the current wealth required to guarantee no bankruptcy if a gamble is accepted. We focus on the measure of riskiness proposed by Foster and Hart.