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He financial manager evaluates various considerations to take their business decisions. Two of the most important are the risk and performance. There are three types of preferences for risk: (averse), the neutral and to look for (seeking).

Which of these three types of preferences regarding risk understand that is best suited to maximize these profits of an enterprise? Is there a preference that is better than the other? Detailed reply.

1- By exposing your answer you should:
2- Risk and define three types.
3- Indicate how the financial manager measures the risk. Justifies a mathematical example.
4- Explain what the effect of the relationship between risk and return in mathematical form.

Explanation / Answer

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