<P> In economics and finance , risk neutral preferences are preferences that are neither risk averse nor risk seeking . A risk neutral party 's decisions are not affected by the degree of uncertainty in a set of outcomes , so a risk neutral party is indifferent between choices with equal expected payoffs even if one choice is riskier . For example , if offered either $50 or a 50 % chance each of $100 and $0 , a risk neutral person would have no preference . In contrast , a risk averse person would prefer the first offer , while a risk seeking person would prefer the second . </P>
<P> In economics and finance , risk neutral preferences are preferences that are neither risk averse nor risk seeking . A risk neutral party 's decisions are not affected by the degree of uncertainty in a set of outcomes , so a risk neutral party is indifferent between choices with equal expected payoffs even if one choice is riskier . For example , if offered either $50 or a 50 % chance each of $100 and $0 , a risk neutral person would have no preference . In contrast , a risk averse person would prefer the first offer , while a risk seeking person would prefer the second . </P>
what does it mean to be risk neutral
what does it mean to be risk neutral
neither risk averse nor risk seeking
neither risk averse nor risk seeking