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Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Prospect theory and mean-variance analysis: Does it make a difference in wealth management? |
Organization Unit | |
Authors |
|
Item Subtype | Original Work |
Refereed | Yes |
Status | Published in final form |
Language |
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Journal Title | Investment Management and Financial Innovations |
Publisher | Dilovi Perspektyvy |
Geographical Reach | international |
ISSN | 1810-4967 |
Volume | 6 |
Number | 1 |
Page Range | 122 - 129 |
Date | 2009 |
Abstract Text | We show that prospect theory is a valuable paradigm for wealth management. It describes well how investors perceive risk and with appropriate modeling it can be made consistent with rational decision making. Moreover, it can be represented in a simple reward-risk diagram so that the main ideas are easily communicated to clients. Finally, we show on data from a large set of private clients that there are considerable monetary gains from introducing prospect theory instead of mean-variance analysis into the client advisory process. |
Related URLs | |
Other Identification Number | merlin-id:4892 |
PDF File | Download from ZORA |
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