I like to do dumb things. If you were one of my friends, this would not be an earth-shattering statement. From skydiving, free climbing, hiking alone in bear or mountain lion country, not wearing a helmet horseback riding or four wheeling at high speeds, stuff like that. Surprisingly though, I don't ski or snowboard even though I live in Colorado. I also don't own or ride a motorcycle, though it seems like a lot of fun. It's not that I am avoiding these activities due to their inherent risk or that they don't seem fun, but, that I like to vary my dumb activities. I figure that if I intermix my dumb activities with safe ones, it puts me at a lower chance of hurting myself. I feel if I add a new risky activity without either subtracting one from my regular ones or add a few safe ones to balance it out, I am putting myself at higher risk for harm. I view this as more or less a Jason's Dumb Things Portfolio based on risk.

Great points made, Jason!

This is not too far away from the notion of systemic vs. un systemic risk. It also links in with one of my pet peeves as a finance professor. Let's tear into some Breadcrumbs.

Class:

1. Think about it for a sec: is the sacred relationship in finance between risk and return or between risk and expected return? What's the difference, and why does it matter?

Answer rating: 100% (QA)

Jasons approach to diversifying his dumb activities aligns with some key financial concepts and your professors inquiry delves into an important disti... View the full answer