The curvature parameters and coefficient of loss aversion utility function proposed in prospect theory by Kahneman and Tversky are researched by means of asset allocation under a single period economic system with aloss aversion investor． This article proved that the curvature parameters，α，β，should be not equal and have a relationship of β－α ＞ 0 and that the loss aversion coefficient，λ，is not a constant and changes with market environments． The ratio of risk assets varies with the difference of β，α and increases with the difference．These theoretical analyses are tested with data from China’s stock market; the empirical result is consistent with the theoretical analysis． An interest finding is that the lower bound of loss aversion coefficient of China’s stock market is far less than that of developed counties．