Assignment:
Question
1) What evidence is there that investors judge risk and return to be negatively related?
2) What psychological forces would lead investors to form such judgments about risk and return?
3) What implications do such judgments hold for the broad debate between proponents of market efficiency and proponents of behavioral finance?
4) How robust are judgments about risk and return to judgments about the expected equity premium?
5) To what extent are investors consciously aware of the way they form judgments about risk and return?
6) How reliable is the evidence on risk and return presented here?
CONCLUTION
Shefrin, H., & Statman, M. (2000). Behavioral Portfolio Theory. The Journal of Financial and Quantitative Analysis, 35(2), 127.
Shefrin, H. M. (2002). Do Investors Expect Higher Returns from Safer Stocks than from Riskier Stocks? SSRN Electronic Journal.