What is the equivalent of security?
The equivalent of security is a payout that is without a risk that someone accepts a gambling with a return that can be larger, but that comes with a risk. The amount of equivalent of certainty varies from man to person. Someone who is a risk aversion can accept the one that is less than the potential gambling -related payout, while others can require higher security to consider their gaming shows to be assessed.
Contestants on game programs are often offered to withdraw: they can take the amount of money and leave, or they can proceed to the next stage of the show to compete for more money. The show counts this sum carefully. Competitors from the aversion Aversion can accept payments and departure, content to leave with some money, rather than none. Others can refuse the offer and continue to the next phase and the chance to go home with more significant winnings.
In the investment community, the equivalents of security may be important. For example, a new company wants to attract investors who are OCHotni gambling at their events for a chance for a big paycheck. They must consider risk -free alternatives that can be available when they work to attract investors to think about the equivalent of the certainty for individual investors. If the initial price per stock is determined too high, investors will not be interested.
A higher payout may be uncertain payout, especially in the financial world. Similarly, some gaming shows are structured in a way that obscures the overall payout potential, with part different. For example, contestants can spin the bike to see how much money they win. This may affect the equivalent of the security for individuals, as they may obviously worry about the unknown nature of the risk.
The certainty of the equalents occurs in connection with determining the risk bonus for the investment or other activity. The risks premium is determined by deducting the risk -free payout from the expected return from a more risky investment. Creating a risk bonus may increase the investment or similarFor activities more attractive because people are willing to take advantage of a higher payout. This tactic is often used in environments such as game programs, to increase tension and create motivation to continue.