




































AGORA International Journal of Economical Sciences, http://univagora.ro/jour/index.php/aijes 

ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 19, No. 1 (2025), pp. 114-123 

 

114 
 

RISK IN FINANCIAL DECISION-MAKING: A CONCEPTUAL 

FRAMEWORK FOR INVESTORS AND CORPORATE MANAGERS  

 

K. HRYTSIV, J. KARTAŠOVA 

 

Kateryna Hrytsiv1 Jekaterina Kartašova2 
¹ ² Vilnius University Business School, Lithuania 
1 https://orcid.org/0009-0004-9053-3069, E-mail: kateryna.hrytsiv@outlook.com 
2 https://orcid.org/0000-0003-3774-1817, E-mail: jekaterina.kartasova@vm.vu.lt  

 

Abstract: This paper explores the multifaceted nature of risk in financial decision-

making by integrating traditional finance models with insights from behavioural finance. It 

assesses the application of models such as the Capital Asset Pricing Model (CAPM), Weighted 

Average Cost of Capital (WACC), and Risk-Adjusted Discount Rates in real-world scenarios, 

examining how their effectiveness is influenced by psychological biases such as 

overconfidence, loss aversion, and herd behaviour. The study illustrates the impact of 

psychological and emotional factors on individual investor actions and corporate long-term 

capital investment decisions through a practical application example. The findings advocate 

for a comprehensive approach that combines computational tools with behaviorally informed 

human judgment, aiming to enhance risk analysis and improve financial returns for investors 

and managers. 

Keywords: Risk perception, behavioural finance, capital budgeting, CAPM, WACC, 

investment decision-making, risk-adjusted discount rate, overconfidence, loss aversion, 

cognitive biases, financial strategy, Warren Buffett, case study analysis. 

 

INTRODUCTION 

Risk is a fundamental component of the financial decision-making process, affecting 

all levels of economic activity, from personal investment decisions to corporate decisions on 

capital allocation. Decision-makers, whether they are picking a basket of stocks or evaluating 

a multimillion-dollar project, have to come to terms with an uncertain future. In financial 

markets, risk is not an obstacle but a return generator, a value driver, and a strategic 

consideration. Insurers endure enormous risks, so the ability to assess, price, and manage risk 

is critical to sustained financial success. 

There are many factors that contribute to financial risk, including market volatility and 

interest rate changes, as well as company-specific uncertainties, such as inefficiencies or a high 

debt load. Risk is generally divided into two categories for analytical purposes: systematic risk, 

which affects the entire market, and unsystematic risk, which is unique to an individual 

company or industry. The business risk – the risk arising from earnings fluctuations caused by 

operational conditions – and the economic risk – the risk added by using debt – also add to the 

uncertainty in the financial arrangements of the firms and the investors. 

Risk perception and risk tolerance are also highly divergent. Behavioural finance has 

demonstrated that cognitive biases, such as risk aversion, overconfidence, and loss aversion, 

are key determinants of investment conduct and are likely to result in behaviour inconsistent 

mailto:kateryna.hrytsiv@outlook.com
mailto:jekaterina.kartasova@vm.vu.lt


Kateryna HRYTSIV, Jekaterina KARTAŠOVA 

115 
 

with a rational economic model. When developing a realistic financial decision model, it is 

essential to incorporate these behavioural complicating factors. 

I advance a framework for integrating conventional finance theories, including the 

Capital Asset Pricing Model (CAPM), adjusted discount rates, and diversification benefits, 

with behavioural economic thinking. This perspective intends to provide investors and 

corporate managers with a richer basis to analyse the role of risk within the decision-making 

contexts of capital budgeting, portfolio selection, and strategic decision-making. The model is 

instrumental in a global, high-information world where good uncertainty management can be 

a source of capital and a competitive edge. 

 

1. Literature review 

1.1. Types of Financial Risk and Their Implications 

Risk factors are present at every stage of financial decision-making. Systematic risk is 

the kind that comes with the market as a whole: recessions, political upheaval and natural 

disasters. These risks are in all investments and cannot be diversified away (otherwise known 

as non-diversifiable risk). On the other hand, unsystematic risk concerns individual companies 

or industries and may include, for example, the new CEO's decisions, product recalls or 

regulation changes. According to (Aswath Damodaran, 2008), there is no way to remove 

systematic risk via diversification, and this type of risk must be priced by using models 

like CAPM. Meanwhile, unsystematic risk can be managed by choosing an appropriate 

asset allocation. (diversification).  

Business risk, which is characterised by fluctuations in operating performance, and 

financial risk, which stems from operating with both leverage and fixed financing 

commitments, are essential to both shareholders and corporate managers (Chen et al., 2010). 

Highly leveraged companies are particularly at risk in turbulent conditions. Warren Buffett 

often notes that risk should not be confused with volatility but rather be defined as “the 

probability of permanent loss of capital” and emphasises that investors and managers across 

the world should act responsibly against the misallocation of financial risk on their balance 

sheets (Buffett & Cunningham, 1998). 

 

1.2. Risk Perception and Capital Budgeting 

Risk perception inevitably colours capital allocation judgments. While the standard 

financial practice has long endorsed employing Risk-Adjusted Discount Rates to appraise 

investment propositions, uncertainty remains an inexact science. This valuation approach 

likewise reconsiders the discount rate contingent on a project's risks, ascribing elevated risks 

to higher rates and accordingly diminished present values. Though fraught with 

unpredictability, some ventures offer outsized returns sufficient to justify looser security 

standards. Overall, quantifying vulnerability informs but does not dictate choice, the final call 

demanding a blend of calculation and intuition.  

  The Capital Asset Pricing Model (CAPM) is necessary for calculating the reasonable 

required rate of return for an investment, considering the risk-free rate, the beta of the 

investment, and the expected market return (Investopedia, n.d.). However, CAPM has faced 

criticism for relying on assumptions such as investor rationality and market efficiency. 



RISK IN FINANCIAL DECISION-MAKING: A CONCEPTUAL FRAMEWORK FOR 

INVESTORS AND CORPORATE MANAGERS 

116 
 

Behavioural finance calls into question such premises, indicating that investors' behaviour is 

often irrational as they are influenced by several cognitive biases (Gervais et al., 2009) 

While behavioural finance identifies several psychological factors influencing 

investment choices, like over-trading due to overconfidence skewing risk assessment, 

optimising decision-making requires acknowledging such cognitive biases. A manager 

underestimating downside risks from overestimating a project's returns could lead to subpar 

capital allocation (Gervais et al., 2009). Conversely, loss-averse investors, disproportionately 

fearing the potential for losses compared to probable gains, may spurn worthwhile 

opportunities. However, recognising how the human mind frequently diverges from rationality 

opens doors to compensating for inherent cognitive limitations and improving outcomes. 

Ulrich Reinhardt points out that “danger perception isn’t just about calculations; it’s 

also strongly influenced by personal experiences and emotions.” Research has shown that 

individual psychological traits and personal financial habits significantly affect how much 

financial risk someone is willing to take and their investment choices. 

Although traditional capital budgeting principles are a helpful guide, a richer analysis 

must take into account the behavioural dimension affecting investment calculus. Traditional 

models tend to feature rational agents who take a dispassionate look at risk and return. But 

psychological tendencies shade our outlook and our choices more than we realise. By 

considering cognitive biases, emotional influences, and real-world constraints, the analysis 

assesses investments more similar to reality. Sophisticated projects with high levels of 

uncertainty cause us to feel more anxiety, which influences our risk tolerance in ways that are 

less predictable than perfect models provide. By acknowledging that both rational and 

emotional explanations of behaviour matter, and with a blended quantitative and qualitative 

approach, insight is gained beyond that offered by the numbers into how strategies will be 

perceived and whether the risks entailed in them will appear to be worth taking. 

 

1.3. Behavioural Aspects Influencing Financial Decisions 

Contrary to classical economic postulates, findings from behavioural finance uncover 

that emotional biases considerably colour fiscal determinations. Aversion toward 

unpredictability, overconfidence in one's forecasts, and intensified melancholy from deficits 

are regularly observable investor behaviours which psychologists have demonstrated for years. 

Such prejudices can lead to irrational allotments of assets, insufficient diversifying of holdings, 

or excessive interchange of properties. 

Bunyamin and Abdul Wahab (2022) find that an investor's risk tolerance is a product 

of financial behaviour, particularly in a highly volatile market. This is supported by 

Damodaran (2008), who states that inconsistencies in behaviour often derail strategic risk 

management. "The stock market is there to transfer money from the Active to the Patient." This 

is a warning against the trap of buying and selling in response to fear and greed (Buffett & 

Cunningham, 1998). 

The Dot-Com Bubble is a typical example of FOMO (fear of missing out) and 

syndicated inflexibility driving investors away from basic risk fundamentals to chase 

speculative returns. During periods of behavioural entrenchment, these kinds of events 

illustrate how emotions can come before objective assessment, resulting in violent mispricings 

and resets. 



Kateryna HRYTSIV, Jekaterina KARTAŠOVA 

117 
 

 

1.4. Integrating Traditional and Behavioural Perspectives 

Financial decisions today require a union of quantitative models and psychological 

insights. As (Musa et al., 2015) argues, effective governance frameworks must balance 

strategic risk controls with consciousness of behavioural risks. CAPM, WACC, and risk-

adjusted return models provide us with the structure to make such assessments, but the actual 

effect on people’s lives, so far as anyone can smell, depends heavily on human judgment. 

This is where Warren Buffett's approach becomes relevant. He emphasises simplicity, 

rational thinking, and a long-term perspective, focusing on a business's fundamentals, quality, 

and integrity of management (Wiley, 2010; Hathaway Inc, n.d.). His impressive track record 

of consistently outperforming the market illustrates that a solid grasp of intrinsic value and 

emotional discipline can often surpass even the most advanced financial models. 

(Aswath Damodaran, 2008) points out that the ideal risk level in a company's risk-

taking strategy should align with its ability to handle risk and the manager's capability to 

evaluate it. This perspective highlights the importance of connecting traditional financial 

frameworks with the realities of human behaviour, which is essential for making sound, 

resilient financial decisions. 

 

2. Methodology 

This study presents a qualitative case analysis aimed at exploring the influence of risk 

perceptions and behavioural biases on capital budgeting and investment decisions. Our 

objective is to better understand how these elements may affect decision-making processes 

when individuals encounter real financial challenges. 

Cases were selected on the basis that they met the following criteria: 

1) Relevance: A direct relationship existed between risk perception and behavioural 

biases on the one hand and capital budget or investment decisions on the other. 

2) Documentation: Evidence could be found in academic journals, financial periodicals 

that are well-known to professionals in finance and business, or industry reports. 

3) Diversity: Cases gave an example of an industry or context other than one already 

covered to broaden your knowledge.  

 

2.1. Case 1: Behavioural Biases in Investment Decision-Making 

Rohatgi (2021) presents a case study examining how behavioural biases influence 

investors' decisions in financial markets. The study suggests that cognitive biases such as 

overconfidence and loss aversion can stray from traditional financial models, influencing 

portfolio performance and investment outcomes. Investigating the interaction between 

psychological predisposition and market operation displays intricacies every investor should 

understand when making choices. 

 

2.2.  Case 2: Risk Perception and Decision-Making in Stock Market Trends 

According to a study carried out in Risk Perception and Decision-Making: A 

Behavioral Finance Approach to Stock Market Trends, n.d.), the biases above have a combined 

effect on people's investment decisions, leading investor behaviour to become risky behaviour, 

and also suggest that markets will then use their experience for no clear purpose. Psychological 



RISK IN FINANCIAL DECISION-MAKING: A CONCEPTUAL FRAMEWORK FOR 

INVESTORS AND CORPORATE MANAGERS 

118 
 

factors and stock market movements are the focus of this research. It seeks to discover whether 

cognitive biases will be responsible for shaping investor behaviour and market trends. 

 

2.3. Case 3: Risk-Adjusted Discount Rates in Capital Budgeting 

A fundamental concept in assessing the profitability of investments is the risk-adjusted 

discount rate. An informative paper by Haktanır and Kahraman (2023) provides a 

comprehensive overview of this concept. It elucidates how the risk-adjusted discount rate 

modifies the standard market discount rate to account for the specific risks associated with a 

given project or investment. Additionally, the article discusses methodologies such as the 

Capital Asset Pricing Model (CAPM), which is employed to calculate these rates. This model 

incorporates factors such as beta to evaluate the expected returns of a particular investment in 

relation to the overall market. 

 

3. Research 

This section offers an extensive examination of life experiences demonstrating the 

impact of risk perception and psychological tendencies on capital allocation and investment 

practices. We aim to uncover the practical intersection of mental influences and conventional 

economic models by exploring distinctive real-world scenarios. 

 

3.1. Case 1: Behavioural Biases in Investment Decision-Making 

Rohatgi (2021) examined the behaviour of individual investors in India and found that 

psychological factors significantly distort rational financial decision-making. The study 

utilised survey data that revealed a prevalent overconfidence bias, leading many investors to 

overestimate their ability to select profitable stocks while neglecting fundamental value 

metrics. Additionally, loss aversion emerged as a critical factor; investors experienced greater 

distress from losses than from equivalent gains, resulting in delayed closure of positions for 

underperforming assets. These psychological tendencies contributed to suboptimal portfolio 

diversification and heightened exposure to market risk. The findings underscore the dominance 

of personal beliefs and emotions over technical and financial evaluations, suggesting that 

education in behavioural finance is essential for enhancing the investment outcomes of retail 

investors. 

 

3.2. Case 2: Risk Perception and Decision-Making in Stock Market Trends 

In a survey of behaviour during periods of market turmoil, focus specifically on the 

responses of retail investors to extreme volatility within emerging markets. Through qualitative 

interviews and sentiment analysis, the authors identified herd behaviour and anchoring as 

essential factors influencing investors during both market rallies and declines. In their 

experience, they noted that price movements and collective sentiment are the primary concerns 

of most investors. Simply put: Investors often trade based on hunches rather than calculating 

their risks rationally. Surprisingly, they found that investors' perception of risk follows the 

market mood from upswing to downswing. This can cause them to act irrationally, including 

panic selling and even speculative buying. The case illustrates the weakness of human nature 

regarding risk appetite and suggests that ongoing siege warfare may be futile in the struggle to 

change people's thinking (Sravan Kumar. M et al., 2025). 



Kateryna HRYTSIV, Jekaterina KARTAŠOVA 

119 
 

3.3. Case 3: Risk-Adjusted Discount Rates in Capital Budgeting 

Risk-Adjusted Discount Rates (RADR) and capital budgeting are discussed by Haktanır 

and Kahraman (2023). Their article presents instances where project evaluations did not yield 

favourable outcomes, often due to the misapplication of discounted risk premiums. One notable 

case outlined in the chapter involves a high-tech company whose management exhibited 

excessive optimism regarding the volatility of incoming cash flows from a new product line. 

Instead of employing a project-specific discount rate, they utilised a general corporate 

Weighted Average Cost of Capital (WACC). This decision led to speculative financing with 

overly ambitious return projections, resulting in cost overruns and revenue shortfalls. The case 

underscores the importance of aligning the discount rate with the specific risks associated with 

the project, highlighting models such as the Capital Asset Pricing Model (CAPM) that 

incorporate beta, which reflects efficient, systematic risk. 

 

These examples highlight the influence of behaviour biases and risk perception on 

investment decisions and capital budgeting procedures. They emphasise the importance of 

incorporating behavioural finance observations into the conventional financial model to 

rationalise and improve the efficiency of the decision-making process. 

 

DISCUSSION  

The case studies analysed demonstrate that a multiplicity of factors influences 

financial decision-making under conditions of uncertainty: quantitative models, the natural 

human mind's tendency to distort reality through a series of cognitive biases that cause us to 

think wrongly and, therefore, put lives at stake. Unfortunately, this makes our judgments a 

little more than half right, while three-quarters of people believe they are usually correct. In 

the concluding section, I compare my findings and previous financial theories or ways of 

thought. I also look at how these latest discoveries might influence managers and investors. 

 

The Relationship Between Risk Perceptions and Financial Models 

Traditional financial theories, such as the Capital Asset Pricing Model (CAPM) and 

the Risk-Adjusted Discount Rate, operate on the premise that decision-makers in pricing are 

rational (Aswath Damodaran, 2008). However, the cases presented illustrate that this 

rationality is often compromised in practice. For instance, in Case 3, discount rates were not 

appropriately adjusted to account for project-specific risk; a generalised Weighted Average 

Cost of Capital (WACC) was employed. This oversight led to overly optimistic projections of 

expected returns and resulted in suboptimal capital budgeting decisions (A Quick Guide to the 

Risk-Adjusted Discount Rate, n.d.). Such instances underscore a critical vulnerability inherent 

in rigid adherence to financial theory, highlighting the necessity for greater consideration of 

project-specific circumstances. 

 

Behavioral Influences on Risk Perception and Investment Strategy 

Exploring the intersection of investment outcomes and behavioural finance reveals 

that psychological factors play an important role in decision-making. The overconfidence, 

loss aversion, anchoring and herding illustrated in these first two cases can lead to irrational 

financial choices. These findings are consistent with prior research on behavioural finance: 



RISK IN FINANCIAL DECISION-MAKING: A CONCEPTUAL FRAMEWORK FOR 

INVESTORS AND CORPORATE MANAGERS 

120 
 

individuals frequently fail to process danger rationally when they are emotionally engrossed 

or unclear about the future. (Gervais et al., 2009) 

Rohatgi (2021) has observed that investors are often hesitant to realise losses in 

investments and too quick to take profits from winners — evidence supporting the behavioural 

concept of loss aversion. Additionally, Sravan Kumar. M et al. (2025) underline the market's 

inefficient features, deriving from overconfidence and the overreaction effect, as agents on the 

market tend to herd rather than analyse. This phenomenon resonates with Warren Buffett’s 

insights on the importance of temperament in investing. Buffett asserts that the most crucial 

attribute for an investor is not intellect but rather temperament. He differentiates between 

reactive market behaviours and the ability to engage thoughtfully with other investors in real-

time, especially in periods of market euphoria and fear (Buffett & Cunningham, 1998;Wiley, 

2010). 

 

Implications for Investors and Corporate Managers 

As an individual investor, these cases remind us that it is necessary to self-examine our 

investment decisions. These messages remind us that financial education should be more than 

simply how to use tools. It should also include a discussion of cognitive biases and decision-

making psychology itself. Some tools available for controlling mistakes caused by 

emotionalism include decision journals, the addition of cool down times, and scheduled 

portfolio rebalancing. Adapting to that unique risk profile of the project requires corporations 

to make their capital budgeting procedures flexible, as the misplaced discount rates in Case 3 

show. Over-reliance on one uniform corporate Weighted Average Cost of Capital (WACC) 

means ignoring the risk levels and market conditions associated with every project. For 

example, managers can consider adopting methods like Capital Project Assessment Models 

(CPAM), conducting scenario analysis, and subjective adjustments that consider behavioural 

factors (Aswath Damodaran, 2008;Dempsey, 2015). 

Governance is another critical factor. Organisations that foster open communication 

and encourage questioning of assumptions may be better equipped to identify and address 

behavioural deviations from optimal decision-making (Musa et al., 2015;(A Quick Guide to the 

Risk-Adjusted Discount Rate, n.d.; Behavioral Factors In Capital Budgeting - FasterCapital, 

n.d.; Capital Asset Pricing Model (CAPM): Definition, Formula, and Assumptions, n.d.; Fast 

Tips: Discount Rate Uses in Behavioral Econ, n.d.; (PDF) Risk Perception and Decision-

Making: A Behavioral Finance Approach to Stock Market Trends, n.d.-b; Risk Adjusted 

Discount Rate: Adjusting for Uncertainty: Risk Adjusted Discount Rates in Capital Budgeting 

- FasterCapital, n.d.; The Psychology of Investing: A Behavioural Economics Perspective on 

CAPM — QUTEFS - QUT Economics and Finance Society, n.d.; The Psychology of Risk: The 

Behavioral Finance Perspective - The Big Picture, n.d.; Understanding Behavioral Aspects of 

Financial Planning and Investing | Financial Planning Association, n.d.; Almansour et al., 

2023; Asbaruna et al., 2023; Aswath Damodaran, 2008; Biondi & Marzo, 2013; Buffett & 

Cunningham, 1998; Bunyamin & Abdul Wahab, 2022; Business & Research, 2015a, 2015b; 

Chen et al., 2010; Décaire et al., 2020; Dempsey, 2015; Fama & French, 2015; Gallagher & 

Ryan, n.d.; Gervais et al., 2009; Haktanır & Kahraman, 2023b, 2023a; Hathaway Inc, n.d.; 

Musa et al., 2015; Ricciardi, 2008; Rohatgi, n.d.; Solomon et al., 2000; Sravan Kumar. M et 

al., 2025; Wiley, 2010).  



Kateryna HRYTSIV, Jekaterina KARTAŠOVA 

121 
 

Theoretical and Practical Integration 

This study suggests that an integrated perspective combining financial theory and 

psychology underlies the findings. Quantitative models, such as the Capital Asset Pricing 

Model (CAPM) and Risk-Adjusted Discount Rate (RADR), offer structured methods for 

estimating risk and return; however, they are not without limitations. By incorporating 

insights from behavioural finance, investors and managers can navigate real-world 

complexities, such as psychological responses to risk factors, that traditional models often 

overlook. 

By combining these views, financial decision-makers can construct more resilient 

strategies, which involve not just the quantification of risk but also its perception and effects 

on behaviour. 

 

CONCLUSIONS 

This article explores how perceptions of uncertainty can sway judgment and presents 

a conceptual framework depicting the relationship between hazard and monetary or 

investment selections. It draws on a comprehensive theoretical structure that combines both 

traditional and behavioural theories. Through literature reviews, case reports, and theoretical 

dialogues, we demonstrate how the Risk Appraisal Model enables utilizing financial 

instruments (like CAPM and WACC) to account for hazards. However, it is necessary to note 

that this representation has constraints, as psychological prejudices can regularly undermine 

its potency. Real-world examples have revealed that leanings such as exaggerating self-

assurance, loss aversion, and herd behaviour can significantly affect how investors and 

companies form resolutions, often guiding them away from what would be considered 

optimal fiscal choices. Balancing risk and return is difficult, as emotion and biases frequently 

overpower rational analysis. While models offer a starting point, accurately anticipating 

behaviour often proves elusive. 

  By connecting risk notions to venture outcomes, this analysis spotlights the gaps 

between theoretical expectations and the realities of risk-taking. It emphasises that fiscal 

decisions involve more than just crunching the numbers; they require understanding human 

behaviour, the perception gained from situational judgment, and the flexibility to adapt. For 

investors and managers, combining the extensive range of quantitative tools available with a 

realistic understanding of risk is essential to make informed and forward. 

 

REFERENCES 

A Quick Guide to the Risk-Adjusted Discount Rate. (n.d.). Retrieved May 26, 2025, from 

https://www.investopedia.com/articles/budgeting-savings/083116/guide-riskadjusted-

discount-rate.asp?utm_source=chatgpt.com 

Almansour, B. Y., Elkrghli, S., Ammar, &, Almansour, Y., Yaser Almansour, B., & 

Almansour, A. Y. (2023). Behavioral finance factors and investment decisions: A 

mediating role of risk perception. https://doi.org/10.1080/23322039.2023.2239032 

Asbaruna, L. W. B., Gorib, R. I., & Syifa, M. A. A. (2023). Behavioral Finance In Investment 

Decisions. International Journal of Ethno-Sciences and Education Research, 3(3), 95–

98. https://doi.org/10.46336/IJEER.V3I3.460 

Aswath Damodaran. (2008). Strategic Risk Taking: A Framework for Risk Management. 

Pearson Education. 



RISK IN FINANCIAL DECISION-MAKING: A CONCEPTUAL FRAMEWORK FOR 

INVESTORS AND CORPORATE MANAGERS 

122 
 

Behavioral Factors In Capital Budgeting - FasterCapital. (n.d.). Retrieved May 25, 2025, 

from https://fastercapital.com/topics/behavioral-factors-in-capital-

budgeting.html?utm_source=chatgpt.com 

Biondi, Y., & Marzo, G. (2013). Decision Making Using Behavioral Finance for Capital 

Budgeting. Capital Budgeting Valuation: Financial Analysis for Today’s Investment 

Projects, 421–444. https://doi.org/10.1002/9781118258422.CH22 

Buffett, W. E., & Cunningham, L. A. (1998). The Essays of Warren Buffett: Lessons for 

Corporate America Essays by Selected, Arranged, and Introduced by THE ESSAYS OF 

WARREN BUFFETT: LESSONS FOR CORPORATE AMERICA Essays by. 

Bunyamin, M., & Abdul Wahab, N. (2022). The Influence of Financial Behaviour on 

Financial Risk Tolerance In Investment Decision: A Conceptual Paper. International 

Journal of Industrial Management, 14(1), 529–542. 

https://doi.org/10.15282/ijim.14.1.2022.7435 

Business, G., & Research, M. (2015a). A Conceptual Framework for Enterprise Risk 

Management performance measure through Economic Value Added. In An International 

Journal (Vol. 7, Issue 2). 

Business, G., & Research, M. (2015b). A Conceptual Framework for Enterprise Risk 

Management performance measure through Economic Value Added. In An International 

Journal (Vol. 7, Issue 2). 

Capital Asset Pricing Model (CAPM): Definition, Formula, and Assumptions. (n.d.). 

Retrieved May 25, 2025, from 

https://www.investopedia.com/terms/c/capm.asp?utm_source=chatgpt.com 

Chen, W. P., Chung, H., Hsu, T. L., & Wu, S. (2010). External financing needs, corporate 

governance, and firm value. Corporate Governance: An International Review, 18(3), 

234–249. https://doi.org/10.1111/J.1467-8683.2010.00801.X 

Décaire, P. H., Gilje, E. P., Roberts, M. R., Taylor, L. A., Abel, A. B., van Binsbergen, J., 

Catherine, S., Glode, V., Kihlstrom, R. E., Roussanov, N., Schwert, M., & Stambaugh, 

R. F. (2020). Capital Budgeting and Idiosyncratic Risk. 

Dempsey, M. (2015). Stock markets, investments and corporate behavior: A conceptual 

framework of understanding. Stock Markets, Investments And Corporate Behavior: A 

Conceptual Framework Of Understanding, 1–332. https://doi.org/10.1142/P1007 

Fama, E. F., & French, K. R. (2015). A five-factor asset pricing model. Journal of Financial 

Economics, 116(1), 1–22. https://doi.org/10.1016/j.jfineco.2014.10.010 

Fast Tips: Discount Rate Uses in Behavioral Econ. (n.d.). Retrieved May 25, 2025, from 

https://www.numberanalytics.com/blog/fast-tips-discount-rate-behavioral-

econ?utm_source=chatgpt.com 

Gallagher, T., & Ryan, P. A. (n.d.). IMPLIED RISK ADJUSTED DISCOUNT RATES AND 

CERTAINTY EQUIVALENCE IN CAPITAL BUDGETING. 

Gervais, S., Kent Baker, H., Nofsinger, J. R., & Blackwell, W. /. (2009). Behavioral Finance: 

Capital Budgeting and Other Investment Decisions. 

Haktanır, E., & Kahraman, C. (2023a). Intuitionistic fuzzy risk adjusted discount rate and 

certainty equivalent methods for risky projects. International Journal of Production 

Economics, 257. https://doi.org/10.1016/j.ijpe.2022.108757 

Haktanır, E., & Kahraman, C. (2023b). Intuitionistic fuzzy risk adjusted discount rate and 

certainty equivalent methods for risky projects. International Journal of Production 

Economics, 257. https://doi.org/10.1016/j.ijpe.2022.108757 

Hathaway Inc, B. (n.d.). BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS. 

Musa, H., Musová, Z., & Debnárová, L. (2015). Responsibility in The Corporate Governance 

Framework and Financial Decision Making Process. Procedia Economics and Finance, 

23, 1023–1029. https://doi.org/10.1016/S2212-5671(15)00371-8 



Kateryna HRYTSIV, Jekaterina KARTAŠOVA 

123 
 

(PDF) Risk Perception and Decision-Making: A Behavioral Finance Approach to Stock 

Market Trends. (n.d.-a). Retrieved May 25, 2025, from 

https://www.researchgate.net/publication/391637221_Risk_Perception_and_Decision-

Making_A_Behavioral_Finance_Approach_to_Stock_Market_Trends 

(PDF) Risk Perception and Decision-Making: A Behavioral Finance Approach to Stock 

Market Trends. (n.d.-b). Retrieved May 25, 2025, from 

https://www.researchgate.net/publication/391637221_Risk_Perception_and_Decision-

Making_A_Behavioral_Finance_Approach_to_Stock_Market_Trends 

Ricciardi, V. (2008). The Psychology of Risk: The Behavioral Finance Perspective. 

Handbook of Finance. https://doi.org/10.1002/9780470404324.HOF002010 

Risk adjusted Discount Rate: Adjusting for Uncertainty: Risk adjusted Discount Rates in 

Capital Budgeting - FasterCapital. (n.d.). Retrieved May 25, 2025, from 

https://www.fastercapital.com/content/Risk-adjusted-Discount-Rate--Adjusting-for-

Uncertainty--Risk-adjusted-Discount-Rates-in-Capital-

Budgeting.html?utm_source=chatgpt.com 

Rohatgi, G. (n.d.). Behavioral Biases in Investment Decision-Making: A Case Study. Journal 

of Scientific and Engineering Research, 2021(8), 175–180. Retrieved May 25, 2025, 

from www.jsaer.com 

Solomon, J. F., Solomon, A., Norton, S. D., & Joseph, N. L. (2000). A CONCEPTUAL 

FRAMEWORK FOR CORPORATE RISK DISCLOSURE EMERGING FROM THE 

AGENDA FOR CORPORATE GOVERNANCE REFORM. The British Accounting 

Review, 32(4), 447–478. https://doi.org/10.1006/BARE.2000.0145 

Sravan Kumar. M, Himadeep. N, Yaseen. SMD, & Dr. D. Rajesh Babu. (2025). Risk 

perception and Decision-Making: A Behavioral Finance Approach to Stock Market 

Trends  . International Journal of Enhanced Research in Management & Computer 

Applications, 14(5). 

The Psychology of Investing: A Behavioural Economics Perspective on CAPM — QUTEFS - 

QUT Economics and Finance Society. (n.d.). Retrieved May 25, 2025, from 

https://www.qutefs.com.au/publications/the-psychology-of-investing-a-behavioural-

economics-perspective-on-capm?utm_source=chatgpt.com 

The Psychology of Risk: The Behavioral Finance Perspective - The Big Picture. (n.d.). 

Retrieved May 25, 2025, from https://ritholtz.com/2015/07/the-psychology-of-risk-the-

behavioral-finance-perspective/?utm_source=chatgpt.com 

Understanding Behavioral Aspects of Financial Planning and Investing | Financial Planning 

Association. (n.d.). Retrieved May 25, 2025, from 

https://www.financialplanningassociation.org/article/journal/MAR15-understanding-

behavioral-aspects-financial-planning-and-investing 

Wiley, J. (2010). WARREN BUFFETT ON BUSINESS PRINCIPLES FROM THE SAGE OF 

OMAHA R I C H A R D J. C O N N O R S. http://www.wiley.com/go/permissions. 
  


