Risk Aversion

Risk Averse is a description of an investor who, when faced with two investments having a similar expected go back, will prefer the one with the cheaper risk. In economics, risk aversion is the behavior of humans (consumers and investors), when subjected to uncertainty, to try and reduce that anxiety. It is the reluctance of any person to take a bargain by having an uncertain payoff in lieu of another bargain having a more certain, but possibly lower, expected payoff.