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What does ARA stand for?

ARA stands for Absolute Risk Aversion

This definition appears very frequently and is found in the following Acronym Finder categories:

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  • Business, finance, etc.

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We have 389 other meanings of ARA in our Acronym Attic

Samples in periodicals archive:

This simple dynamic asset threshold effectively links Periods 1 and 2 in such a way that for some parameter values there is a stark divergence between standard static risk preferences, as reflected in the (unobservable) Arrow-Pratt coefficient of absolute risk aversion (-u"/u'), and what might be termed a "dynamic risk response" as reflected in observed risk-taking behavior given agent knowledge of the prevailing asset dynamics of the system.
The optimal income replacement rate for nonworkers therefore rises with earnings uncertainty if taxpayers' absolute risk aversion declines sufficiently slowly (or rises) with consumption.
24) For the slope (23) to lie between -1 and 0, this difference must be negative; that is, the denominator must be larger than the numerator in absolute terms, which using the FOC (21) is equivalent to [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] which establishes the following: Lemma 2 (Privately provided SI): The slope of the reaction function in a setting of private provision of SI depends on how the Arrow-Pratt measure of absolute risk aversion A changes with wealth.