risk

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Risk

Often defined as the standard deviation of the return on total investment. Degree of uncertainty of return on an asset. In context of asset pricing theory. See: Systematic risk.

Risk

The uncertainty associated with any investment. That is, risk is the possibility that the actual return on an investment will be different from its expected return. A vitally important concept in finance is the idea that an investment that carries a higher risk has the potential of a higher return. For example, a zero-risk investment, such as a U.S. Treasury security, has a low rate of return, while a stock in a start-up has the potential to make an investor very wealthy, but also the potential to lose one's entire investment. Certain types of risk are easier to quantify than others. To the extent that risk is quantifiable, it is generally calculated as the standard deviation on an investment's average return.

risk

The variability of returns from an investment. The greater the variability (in dividend fluctuation or security price, for example), the greater the risk. Because investors are generally averse to risk, investments with greater inherent risk must promise higher expected yields.

Risk.

Risk is the possibility you'll lose money if an investment you make provides a disappointing return. All investments carry a certain level of risk, since investment return is not guaranteed.

According to modern investment theory, the greater the risk you take in making an investment, the greater your return has the potential to be if the investment succeeds.

For example, investing in a startup company carries substantial risk, since there is no guarantee that it will be profitable. But if it is, you're in a position to realize a greater gain than if you had invested a similar amount in an already established company.

As a rule of thumb, if you are unwilling to take at least some investment risk, you are likely to limit your investment return.

risk

see UNCERTAINTY AND RISK.

risk

Uncertainty regarding the possibility of loss.

References in periodicals archive ?
These insights empower lenders to convert many rejected loan requests into approved loans while maintaining acceptable risk levels.
During 2013 it became clear that important prerequisites for Project 1 of the modernization program in the NAV was not feasible with acceptable risk.
The PDR is a comprehensive review that demonstrates that the design meets all system requirements within acceptable risk constraints, establishing approval for proceeding with detailed design.
They also take care to determine the acceptable risk limits for each product on both an individual and aggregate basis.
He explains the development of written programs, the identification and mitigation of hazards, the development of a safe workforce through communications, and motivational techniques including behavior-based safety, involvement, and training, as well as tracking acceptable risk and how to comply with OSHA regulations.
If you are an acceptable risk to the insurer and you can afford the premiums, there should not be any problems.
Dubai The region's high net worth individuals seem to have changed their attitude towards investments regarding acceptable risk and expected rewards.
For the Kremer family that acceptable risk went terribly wrong when little Brad Kremer, just 18 months old, plunged from a hotel balcony in Sardinia.
From a business point of view then, it becomes an acceptable risk to cut back on the level of cover at a fire station at a time when it appears not to be needed.
In his latest book, Take the Risk: Learning to Identify, Choose, and Live with Acceptable Risk (Zondervan; $19.
Shepherd: Acceptable risk is tweaking a successful show.
Manages ONS investments, along with the Board and other advisors, to attain targeted return at acceptable risk

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