Necessity to take into account both index preeminently it is possible to illustrate a next example. Will assume probability that concert on which a ticket is already purchased will take place with probability 0.5, obviously, that most purchasing a ticket will come at concert.

Will assume now, that probability of favourable end of flight of airliner makes also 0.5, obviously, that most passengers will give up flight.

This abstract example shows that at equal probabilities of unfavorable end the accepted decisions will be arctic opposite, that proves the necessity of calculation of «cost of risk».

The special attention is accented on circumstance that attitude of investors toward a risk subjectively, therefore in description of risk there are the third factors is tolerance of investor to the risk. The necessity of account of this factor illustrates a next example.

Will suppose we have two project with the followings parameters: A project «A» is a profitableness – 8% Standard deviation – 10%. A project «V» is a profitableness – 12% Standard deviation – 20%. The initial cost of both projects is identical – 100.000$.

Probability to appear below than this level there will be the following:

From what it ensues obviously, that project «A» is less risky and him it is necessary to prefer a project. However it not quite so, as a final decision about investing will depend on the degree of tolerance of investor to the risk, that it is evidently possible to present the curve of indifference.

Curve of indifference as criterion of tolerance of investors to the risk.

Graphicly estimating individual attitude of investor toward a risk is possible on the degree of steepness of curve of indifference, what it is steeper, the higher risk non-acceptance, and vice versa what that attitude toward a risk. In an order in number to estimate tolerance to the risk an author suggests to expect the tangent of angle of slope of tangent.

Attitude of investors toward a risk it is possible to describe not only the curves of indifference but also in terms of theory of utility. Attitude of investor toward a risk in this case reflects function of utility. Abscise axis is a change of the expected profit, and a y-axis is a change an utility. As in general case a zero utility corresponds a zero profit, a chart passes through beginning of co-ordinates.

As the accepted investment decision can lead both to the positive results (to the profits) so to subzero (losses), then an utility of him also can be both positive and subzero.

Importance of application of function of utility as for investment decisions will illustrate a next example.

Will assume, an investor stands before a choice to invest him or not the facilities in a project which allows him with identical probability to win and lose 10.000 dollars (ends And and In accordingly). Estimating this situation from positions of probability theory, it is possible to assert that an investor with the equal degree of probability can both invest the facilities in a project and give up him. However, analysing the curve of function of utility, it is possible to see that it not quite so.

Curve of utility as criterion of acceptance of investment decisions.