Perception of risk in investment decisions is an emerging topic in behavioral finance discussions. Inspired by recent Chinese financial market turbulence, I will briefly present here main points of the risk perception issue, mainly picked up from much more descriptive Victor Ricciardi's article (Ricciardi, 2010) , which I found suitable for a blog form.
1. Perception of Risk
Perception is how we become conscious about the world and ourselves in the world. Perception is also fundamental to unde