Managerial Economics

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what advice would you give someone you believe to be excessively wary of risk?

  • Managerial Economics -

    I think that would depend upon what you mean by "excessively."

    If we never took risks, we wouldn't get in a car or plane; indeed, we wouldn't even cross the street. Columbus took a risk -- and here we are!

    On the other hand, some of the big financial institutions took huge risks in loaning money to people who couldn't repay them. These institutions lost -- big time.

    Moderate risks, of course, are necessary for success. If a manager never risks researching a new product or trying innovative techniques and technologies, then she will not help the company increase its sales and profits.

  • Managerial Economics -

    This is the whole question

    what advice would you give someone you believe to be excessively wary of risk?assume you are an investor in the stock market

  • Managerial Economics -

    A person who is excessively wary of risk should NEVER invest in the stock market!

    No stocks keep increasing in price over long periods of times. Although there are some fundamental economic principles involved in stock prices, essentially, it's investor emotions and perceptions that drive the stock market.

    I'd advise this person to invest in government bonds. There's no risk, but very small returns.

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