Communicating Asset Risk: How the format of historic volatility information affects risk perception and investment decisions

An experiment examined the effect that the type and presentation format of information about investment options have on expectations held by investors about asset risk, returns, and volatility. Some respondents were provided with the names of investment options in addition to historical (1987-97) volatility data, and some were not. Historical volatility was presented either as a bar graph of returns per year or as a continuous density distribution of returns over the 10-year period. Risk and volatility perceptions both varied significantly as a function of type and format of information, but in different ways. Biases in risk perception, but not in volatility forecasts, affected portfolio decisions.

Maturation of nuclear lamin A involves a specific carboxy-terminal trimming, which removes the polyisoprenylation site from the precursor; implications for the structure of the nuclear lamina.

Lamin A, a nuclear lamina protein of differentiated cells, is synthesized as a precursor of the mature molecule. Protein sequencing of the carboxyterminal 14 kDa fragment shows a lack of the last 18 residues predicted by cDNA sequencing. The carboxy-terminal proteolytic maturation explains previous biochemical results including the loss of the polyisoprenylation site now located to the CXXM motif at the end of the chain. This view and earlier results on lamin B predict multiple post-translational modifications shared by lamins A and B. While retained by lamin B, which is present in all cells, they are lost by maturation from lamin

The Impact of Institutions on the Decision How to Decide

The human mind is not a general problem solving machine. Instead of deliberately, consciously and serially processing the available information, men can rely on routines, rules, roles or affect for the purpose. They can bring in technology, experts or groups. For all of these reasons, men have a plurality of problem solving modes at their disposition. Often, the meta-choice of problem solving mode matters for behavioural output. Some performance standards are only to be met if a certain problem solving mode is used, like a well-established skill. Other requirements are easier to fulfil with some problem solving modes. This explains why institutions frequently impact on the choice of problem solving mode. To show how institutions are able to do that, a model of problem solving modes is developed. It allows to systematise the access points for institutional intervention.Decision Making, Problem Solving, Institutions

Testing Invariance in Risk Taking: A Comparison Between Anglophone and Francophone Groups

This article investigates the measurement invariance of 3 related constructs across 2 groups sampled from Anglophone and Francophone adult populations. Multiple-group confirmatory factor analyses explored the factor structures of the Domain-Specific Risk-Taking (DOSPERT) Scale (Weber, Blais, & Betz, 2002), the Risk-Taking scale of the Jackson Personality Inventory (Jackson, 1994), and the Sensation-Seeking Scale (Zuckerman, 1980; 1994) both within and between the 2 groups of 172 Anglophone and 187 Francophone participants. The psychometric properties of the original and translated instruments are discussed, as is the meaningfulness of using these scales in these populations. Le présent article se penche sur l’invariance des mesures de trois construits corrélés pour deux groupes échantillonnés issus de populations adultes anglophones et francophones. Des analyses factorielles confirmatoires de groupes multiples ont été conduites sur les structures factorielles de l’échelle Domain-Specific Risk-Taking (DOSPERT) (Weber, Blais, et Betz, 2002), de l’échelle de prise de risque de l’inventaire de personnalité (Personality Inventory) de Jackson (Jackson, 1994), et de l’échelle de recherche de sensations (Sensation-Seeking Scale) de Zuckerman (Zuckerman, 1980; 1994) aussi bien à l’intérieur de deux groupes de 172 participants anglophones et de 187 participants francophones qu’entre ces deux mêmes groupes. Nous discutons des propriétés psychométriques des instruments originaux et traduits, de même que de la pertinence d’utiliser ces échelles au sein des populations en question.measurement invariance, psychometric scale, risk taking, sensation seeking, échelle psychométrique, invariance des mesures, prise de risques, recherche de sensations

Multilevel Monte Carlo for Random Degenerate Scalar Convection Diffusion Equation

We consider the numerical solution of scalar, nonlinear degenerate convection-diffusion problems with random diffusion coefficient and with random flux functions. Building on recent results on the existence, uniqueness and continuous dependence of weak solutions on data in the deterministic case, we develop a definition of random entropy solution. We establish existence, uniqueness, measurability and integrability results for these random entropy solutions, generalizing \cite{Mishr478,MishSch10a} to possibly degenerate hyperbolic-parabolic problems with random data. We next address the numerical approximation of random entropy solutions, specifically the approximation of the deterministic first and second order statistics. To this end, we consider explicit and implicit time discretization and Finite Difference methods in space, and single as well as Multi-Level Monte-Carlo methods to sample the statistics. We establish convergence rate estimates with respect to the discretization parameters, as well as with respect to the overall work, indicating substantial gains in efficiency are afforded under realistic regularity assumptions by the use of the Multi-Level Monte-Carlo method. Numerical experiments are presented which confirm the theoretical convergence estimates.Comment: 24 Page

Rotor redesign for a highly loaded 1800 ft/sec tip speed fan. 1: Aerodynamic and mechanical design report

A quasi three dimensional design system and multiple-circular-arc airfoil sections were used to design a fan rotor. An axisymmetric intrablade flow field calculation modeled the shroud of an isolated splitter and radial distribution. The structural analysis indicates that the design is satisfactory for evaluation of aerodynamic performance of the fan stage in a test facility

Investment decisions and time horizon: Risk perception and risk behavior in repeated gambles

To investigate the effect of time horizon on investment behavior, this paper reports the results of an experiment in which business graduate students provided certainty equivalents and judged various dimensions of the outcome distribution of simple gambles that were played either once or repeatedly for 5 or 50 times. Systematic mistakes in the ex-ante estimations of the distributions of outcomes after (independent) repeated plays were observed. Despite correctly realizing that outcome standard deviation increases with the number of plays, respondents showed evidence of Samuelson's (1963) fallacy of large numbers. Perceived risk judgments showed only low correlations with standard deviation estimates, but were instead related to the anticipated probability of a loss (which was overestimated), mean excess loss, and the coe±cient of variation. Implications for future research and practical implications for financial advisors are discussed

Who’s Afraid of a Poor Old Age?: Risk Perception in Risk Management Decisions

Retirement planning and voluntary as well as mandated contributions to pension plans require a series of decisions under uncertainty. Those range from initial decisions about the magnitude of contributions and allocation across different investment options and choice of option providers, to periodic reviews of these decisions in light of possible changes in goals or circumstances. Behavioral decision research provides a series of lessons about how such decisions are made and thus for the optimal design of pension plans. This chapter will addresses the role of affect in perceptions of risk and subsequent decisions to take actions that reduce or manage perceived risks. I review evidence showing that individual and group differences in risk perception, much more than differences in risk attitude, are responsible for differences in the choices people make. If people fail to be alarmed about a risk or hazard, they fail to take precautions. Risk perception, on the other hand, is predictable from general characteristics of the hazard and from prior, personal history. The risks associated with inadequate retirement planning have all the characteristics associated with hazards that do not evoke strong visceral reactions

Communicating asset risk : how the format of historic volatility information affects risk perception and investment decisions

An experiment examined the effect that the type and presentation format of information about investment options have on expectations held by investors about asset risk, returns, and volatility. Some respondents were provided with the names of investment options in addition to historical (1987-97) volatility data, and some were not. Historical volatility was presented either as a bar graph of returns per year or as a continuous density distribution of returns over the 10-year period. Risk and volatility perceptions both varied significantly as a function of type and format of information, but in different ways. Biases in risk perception, but not in volatility forecasts, affected portfolio decisions