Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248602 
Year of Publication: 
2021
Series/Report no.: 
ISER Discussion Paper No. 1143
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
In this paper, we reexamine a bias revealed by Kunz et al. (2017) regarding structured financial products known as barrier reverse convertibles (BRCs) with worst-of payout characteristics. Namely, using a nonincentivized survey of investor risk perceptions, Kunz et al. (2017) found that when safe assets are included with risky assets to provide the underlying assets of a BRC, investors erroneously perceive a lower risk for the BRC when in fact it becomes higher. We confirm the same bias among student participants using the results of an incentivized experiment. However, we do not observe any similar bias among finance professionals.
Subjects: 
Experiment
Barrier Reverse Convertibles
JEL: 
G11
G41
C99
Document Type: 
Working Paper

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