lower during recession because regulators and investors focus more on downside risk and require conservative reporting by …

uncertainty over public regulatory policy. Underwriting involving random losses to policyholders is one source of risk to the … equity value of insurance firms. Solvency regulations, however, pose a second source of risk to equity value when the … sources of risk, we derive the valuation equation for property-liability underwriting inclusive of the respective best …

the standard approach, the target firm's expected return and risk are modeled as a parametric curve in terms of a critical … business decision. A general condition is derived for characterizing how a risk-averse or risk-seeking agent may behave … differently from a risk-neutral decision maker. This general theorem is applied to solve several examples that demonstrate the …

and the risk of investment funds. Thus, we begin by developing a theoretical analysis about profit and loss … of adverse selection problem between the fund manager and the investor, shows that the risk aversions of the fund manager … performance and the risk of funds. To achieve our objective, we create a unique database that has an international sample of …

consistent with Prospect Theory (Kahneman and Tversky, [39]; Tversky and Kahneman, [63]), i.e., loss aversion and mild risk … seeking in losses. Loss aversion (risk seeking in losses) induces speculators to trade less (more), and less cautiously (more … costly – in order to mitigate (enhance) their perceived risk of a trading loss. We demonstrate that these forces have novel …