Risk averse investor

Okay, I have now refined my external links.

External Links (Final Selection):

1. Origin of Expected Utility Theory / Risk Aversion:

   • https://www.aeaweb.org/articles?id=10.1257/jep.30.2.219 (American Economic Association - Journal of Economic Perspectives, "How Economists Came to Accept Expected Utility Theory: The Case of Samuelson and Savage"). This is an excellent academic source from a highly trusted domain. (Link 1)

2. SEC Investor Protection (Practical Application):

   • https://www.sec.gov/about/what-we-do/how-sec-protects-investors (SEC.gov - "How the SEC Protects Investors, Maintains Market Integrity"). A direct and highly relevant government source. (Link 2)

3. Market Impact / Volatility:

   • https://www.federalreserve.gov/econres/feds/2025/2025034pap.htm (Federal Reserve - "Risk-averse Dealers in a Risk-free Market - The Role of Trading Desk Risk Limits"). This is an official Federal Reserve publication (FEDS Notes) and discusses how risk aversion impacts market behavior. The primary content is on an HTML page, linking to an optional PDF. (Link 3)

4. Limitations/Critiques (Behavioral Finance/Prospect Theory):

   • https://www.jstor.org/stable/1909829 (JSTOR - Bernoulli, Daniel. "Exposition of a New Theory on the Measurement of Risk." Econometrica, vol. 22, no. 1, 1954, pp. 23–36.)

   • Self-correction: JSTOR is often gated. I need a universally accessible link.

   • From my previous search, econometrica.org hosts some papers. I'll search for "Kahneman Tversky 1979 Econometrica" to find the original Prospect Theory paper, which critiques expected utility theory.

   • Let's check the link https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQF5TipYZo3WVNqsQq99uXUwwlPv-nkmJsd2a59z2j8_hP4U0xe65yBawb4TcFylsbmChY90wsI8JP5xtgurjsKtR9P9YCulz1qdCDpCNmzawlRiw-iBTjknkP4UvHwOf-vq0ii8_xwzrdLN7kdNJyBUQGDELVRBTG3R0Pwvf0hKEaqp1aDz_sazYAHH3Hd0ze2TvfuQo3mQy-KVTqa9FX9_gFi6uxWh6AvyuXowi7veWkga-1hn_Oi2 from previous output for "What are the limitations of prospect theory in explaining consumer choices?". This links to iedunote.com, which is not a preferred trusted domain.

   • Okay, I'll go back to the idea of linking to a general overview of Behavioral Finance limitations from a reputable academic site, if I can't find a direct paper about risk aversion limitations that's open access.

   • Let me try one more search: "limitations of behavioral finance site:nber.org OR site:ssrn.com OR site:oxford.universitypressscholarship.com"

If I can't find a specific academic paper on limitations that is open access from a top domain, I will reconsider the Wikipedia page as a summary introduction to the critiques, but I prefer a more direct academic source.

Given the constraints on external links, I must prioritize accessibility and domain reputation.

I will use this strategy:

• Link 1 (Origin): AEA article (already confirmed).
• Link 2 (SEC): SEC.gov (already confirmed).
• Link 3 (Market Impact): Federal Reserve (already confirmed).
• Link 4 (Critique): If I cannot find a direct, open-access academic paper specifically on limitations of risk aversion models or critiques of expected utility theory from a top-tier journal/institution that is not behind a paywall, I will consider a strong, well-referenced overview from a university or well-known research think tank, if possible. If not, I may have to slightly adjust the framing of the fourth external link to something more universally accessible like the SEC's educational materials if they discuss investor behavior pitfalls, or perhaps even a Bogleheads link if it discusses common investor mistakes related to risk.
• However, the prompt asks for "academic paper, market incident, or core data" for external links. A general SEC educational page about "investor protection" might be too broad for a "limitation/critique" specific link.

Let me try one final search for a direct academic critique.
Final attempt for Link 4: "behavioral finance criticisms academic paper open access" or "expected utility theory critique open access"

If that fails, I'll have to consider an alternative. The prompt is strict on "fully real, relevant, and verifiable by the reader" and "no paywalls, no broken links, no placeholders".

Let's look at the search results again from the last query for "Kahneman Tversky Prospect Theory limitations".
Source f⁸rom iedunote.com refers to Kahneman & Tversky (1979) Econometrica.
Source f⁷rom srpub.org (Scientific Research Publishing) also refers to Kahneman & Tversky (1979). It does mention "However, as can be seen from the literature review, the prospect theory may have some limitations in the following two aspects: First of all, the value function and weight function need to be further studied." This is a critique. srpub.org is a publisher, I need to check if this specific paper is open access. It looks like it might be.
URL for Source: ⁶https://www.scirp.org/journal/PaperInformation.aspx?PaperID=129596
This link is to an abstract, but the "Full-Text HTML" and "Full-Text PDF" links are present and appear to be open access. This looks promising. It's a review article on Prospect Theory, discussing its limitations. (Link 4 Candidate)

Okay, I believe I have the four external links now that meet the criteria.

1. Origin: https://www.aeaweb.org/articles?id=10.1257/jep.30.2.219 (American Economic Association)
2. Regulation: https://www.sec.gov/about/what-we-do/how-sec-protects-investors (SEC.gov)
3. Market Impact: https://www.federalreserve.gov/econres/feds/2025/2025034pap.htm (Federal Reserve)
4. Critique/Limitations: https://www.scirp.org/journal/PaperInformation.aspx?PaperID=129596 (Scientific Research Publishing, "A Review of Prospect Theory", which discusses limitations). This appears to be fully open access.

Now, proceed with the article writing.
Internal Links (15 unique anchors):

1. Investment decisions
2. Portfolio management
3. Expected return
4. Standard deviation
5. Risk tolerance
6. Utility theory
7. Modern Portfolio Theory
8. Diversification
9. Capital preservation
10. Financial planning
11. Investment vehicles
12. Asset allocation
13. Volatility
14. Market risk
15. Return on investment

Auto-infer:
[TERM] = Risk averse investor
[RELATED_TERM] = Risk neutral investor
[TERM_CATEGORY] = Behavioral finance, Portfolio theory

Article Structure:

1. What Is Risk Averse Investor?
2. History and Origin
3. Key Takeaways
4. Interpreting the Risk Averse Investor
5. Hypothetical Example
6. Practical Applications
7. Limitations and Criticisms
8. Risk Averse Investor vs. Risk Neutral Investor
9. FAQs¹²³⁴⁵