ABSTRACT
If we denote the larger syndicate as syndicate I and the smaller as syndicate II, then we can re-state the above propositions symbolically:
(1) σ2I < σ 2 II ) syndicate I is more risk averse than syndicate II
(2a) σ2I > σ 2 II &
) syndicate I is more risk averse than syndicate II (2b) σ2I > σ
) syndicate I is less risk averse than syndicate II
(where μ = the mean return for the syndicate as a whole; and σ2 = the variance of returns for the syndicate as a whole, and we note that x ¼ μ=n and varðxÞ ¼ σ2=n2).
