[lanstin]

What is the optimal risk adjustment ratio? And it is chosen by reason or by personal preference? Many software engineers are a bit risk averse and just do what they are told to do. Many entrepreneurs would rather experience the rushes of a business roller-coaster and walk away with no money than just sit and program as told.

[darawk]

There is no optimal ratio per se. You just divide gain by risk and maximize that quantity. This is a scale invariant function, at least, with respect to its maximum.

[lanstin]

I think you must be omitting variables, or simply trying to maximize dollars or some other approximately ordered quantity rather than maximize subjective fulfillment in life.

[darawk]

Which variables are being omitted? Certainly there are other variables relevant to a quality life than money. But the rules apply to any utility function you might come up with. You want to maximize risk-adjusted return.