Estimating Probabilities Relevant to Calculating Relative Risk-Corrected Returns of Alternative Portfolios.

B-Tier
Journal: Journal of Risk and Uncertainty
Year: 1997
Volume: 15
Issue: 3
Pages: 191-200

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In making all-or-none choices between alternative securities, Samuelson (1997) suggested that investors of different risk-aversion should calculate from past samples of those securities their relevant Harmonic Means, or Geometric means, or other associative means representative of their respective degrees of relative-risk-aversion. Here it is shown how this learning procedure can be improved upon when you have prior knowledge that the securities have log-Normal distributions. Classical estimation theory, concerning consistent, efficient, and sufficient statistics, is shown to have a cash value by means of the calculable measure of (ex ante) "risk-corrected certainty equivalents." Needed qualifications and testings are also presented. Copyright 1997 by Kluwer Academic Publishers

Technical Details

RePEc Handle
repec:kap:jrisku:v:15:y:1997:i:3:p:191-200
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29