| Article ID: | iaor2008312 |
| Country: | Greece |
| Volume: | 1 |
| Issue: | 1 |
| Publication Date: | Jun 2005 |
| Journal: | Journal of Financial Decision Making |
| Authors: | Noulas A.G., Papanastasiou J.A. |
| Keywords: | risk |
This paper examines the problem of optimal loan pricing under uncertainty. The model indicates the positive relation between loan price and lender's risk aversion. Moreover, general results are derived to show the relation between loan pricing and the first two moments of the loan interest elasticity distribution. Finally empirical evidence is used to investigate the relation between borrowers' risk and the moments of the loan elasticity distribution.