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Ruth H. Lytton

Bio: Ruth H. Lytton is an academic researcher from Virginia Tech. The author has contributed to research in topics: Financial risk & Financial risk management. The author has an hindex of 7, co-authored 13 publications receiving 733 citations.

Papers
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Journal ArticleDOI
TL;DR: In this paper, the authors explored conceptual, methodological, and empirical issues related to the development of a financial risk-tolerance assessment instrument and proposed a 13-item risk assessment instrument.

362 citations

01 Jan 2001
TL;DR: In this paper, the survey of consumer finances (SCF) offers researchers one of the most popular sources of data for the study of financial risk tolerance, and two studies were designed to test the concurrent validity of the SCF financial risk-tolerance assessment question.
Abstract: The Survey of Consumer Finances (SCF) offers researchers one of the most popular sources of data for the study of financial risk tolerance. This paper reports findings from two studies that were designed to test the concurrent validity of the SCF financial risk tolerance assessment question. Comparisons between the commonly used one-item SCF assessment measure and a 13-item risk-tolerance assessment index were undertaken. Results of the concurrent validity analyses suggest that the SCF question does not represent the full spectrum of financial risk tolerance, but might reflect investment choice attitudes

108 citations

Journal ArticleDOI
TL;DR: This paper explored how projection bias, as explained by regret theory, may shape financial risk tolerance attitudes and found that gender, income, and stock market price changes, as measured by the NASDAQ, the Dow Jones Industrial Average, and the Standard & Poor's 500 indexes, help explain risk attitudes.
Abstract: Behavioral finance theories explain "why" individuals exhibit behaviors that do not maximize expected utility. This study explores how projection bias, as explained by regret theory, may shape financial risk tolerance attitudes. The results suggest that gender, income, and stock market price changes, as measured by the NASDAQ, the Dow Jones Industrial Average, and the Standard & Poor's 500 indexes, help explain risk attitudes. Risk tolerance appears to be an elastic and changeable attitude. This research expands on the work of Shefrin [2000], who reported that recent stock market price changes exert a strong influence on risk tolerance attitudes and behaviors.

101 citations

Journal Article
TL;DR: In this article, the authors examined the validity of a 13-item risk tolerance assessment instrument and found that responses to the 13 items were correlated with portfolio asset ownership as explained by Modern Portfolio Theory.

88 citations

Posted Content
TL;DR: In this article, the use of financial ratios as a diagnostic and informational tool has become increasingly popular in financial counseling and planning situations, and the results of ratio analysis suggest insights not readily apparent from merely studying a balance sheet and an income and expense statement.
Abstract: Use of financial ratios as a diagnostic and informational tool has become increasingly popular in financial counseling and planning situations. Results of ratio analysis suggest insights not readily apparent from merely studying a balance sheet and an income and expense statement. Nine financial ratios are presented, defined, calculated, and interpreted using an illustrative case family. Application of the financial ratios by practitioners, educators, and researchers will further clarify their usefulness for providing feedback on the financial situation, for measuring change in financial status over time, and for providing recommendations to clients.

49 citations


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TL;DR: This paper found that women are consistently more risk averse than men in the Zuckerman Sensation-Seeking Scale (SSS) task and that women overestimated the risk aversion of others, especially that of women, and most strongly with respect to men's predictions of women's choices.
Abstract: Subjects in a laboratory experiment completed the Zuckerman Sensation-Seeking Scale (SSS) then chose among five alternative gambles with substantial financial stakes. The gambles differed in expected return and variance. Gambles were presented in one of two different frames in a between-subjects design. In one, subjects were paid a fixed sum for completing the survey and that sum was then at risk in the subsequent gamble choices. In the other, all payoff amounts for the gambles were non-negative. Subjects were paid according to their choices and the outcomes of the gambles. We tested for sex differences in this choice task and found women to be consistently more risk averse, on average, than men. We observed no difference across frames. Subjects were then asked to guess the gamble choices of each of the other participants and were rewarded for each correct answer. Subjects of both sexes did substantially better than chance in guessing the particular choices of individuals of both sexes, but both men and women overestimated the risk aversion of others, especially that of women, and most strongly of all with respect to men's predictions of women's choices. Possible real-world implications of biased assumptions about women's risk attitudes are discussed.

721 citations

Journal ArticleDOI
TL;DR: The history of Lloyd's of London, the famous insurance firm, is described in this paper, where the authors describe the many intriguing people and tantalizing mysteries so peculiar to the mathematics of chance.
Abstract: ural and Political Observations Made upon the Bills of Mortality (1662) stands as the first great example of modern statistical data analysis, Bernstein also spends some time telling us about the genesis of Lloyd’s of London, the famous insurance firm. This weaving of topics that are standard in the history of probability and statistics with many that are not is one of the strengths and attractions of the book. Another is the obvious zest with which Bernstein describes the many intriguing people and tantalizing mysteries so peculiar to the mathematics of chance.

665 citations

Posted Content
TL;DR: This article developed and evaluated a simple gamble-choice task to measure attitudes toward risk, and applied this measure to examine differences in risk attitudes of male and female university students. But they found that women are significantly more risk averse than men in all three settings, and predictions of both women and men tend to confirm this difference.
Abstract: We develop and evaluate a simple gamble-choice task to measure attitudes toward risk, and apply this measure to examine differences in risk attitudes of male and female university students In addition, we examine stereotyping by asking whether a person's sex is read as a signal of risk preference Subjects choose which of five 50/50 gambles they wish to play The gambles include one sure thing; the remaining four increase (linearly) in expected payoff and risk Each subject also is asked to guess which of the five gambles each of the other subjects chose, and is paid for correct guesses The experiment is conducted under three different frames: an abstract frame where the two highest-payoff gambles carry the possibility of losses, an abstract frame with no losses, and an investment frame that mirrors the payoff structure of the former We find that women are significantly more risk averse than men in all three settings, and predictions of both women and men tend to confirm this difference While average guesses reflect the average difference in choices, only 27 percent of guesses are accurate, which is slightly higher than chance

645 citations

Journal ArticleDOI
TL;DR: This article found that women are consistently more risk averse than men, on average, than men when asked to guess the gamble choices of each of the other participants and were rewarded for each correct answer, while men did substantially better than chance in guessing the particular choices of individuals of both sexes.

604 citations

Journal ArticleDOI
TL;DR: For instance, this paper found that women are significantly more risk averse than men in all three settings, and predictions of both women and men tend to confirm this difference, while average guesses reflect the average difference in choices, only 27 percent of guesses are accurate.
Abstract: We develop and evaluate a simple gamble-choice task to measure attitudes toward risk, and apply this measure to examine differences in risk attitudes of male and female university students. In addition, we examine stereotyping by asking whether a person's sex is read as a signal of risk preference. Subjects choose which of five 50/50 gambles they wish to play. The gambles include one sure thing; the remaining four increase (linearly) in expected payoff and risk. Each subject also is asked to guess which of the five gambles each of the other subjects chose, and is paid for correct guesses. The experiment is conducted under three different frames: an abstract frame where the two highest-payoff gambles carry the possibility of losses, an abstract frame with no losses, and an investment frame that mirrors the payoff structure of the former. We find that women are significantly more risk averse than men in all three settings, and predictions of both women and men tend to confirm this difference. While average guesses reflect the average difference in choices, only 27 percent of guesses are accurate, which is slightly higher than chance.

539 citations