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 classic literature ?
Her husband's suffering and dangers, and the danger of her child, all blended in her mind, with a confused and stunning sense of the risk she was running, in leaving the only home she had ever known, and cutting loose from the protection of a friend whom she loved and revered.
Would you like to risk a month in a dry time like this?
But the great mass of those who came from a distance always ran the risk and took the chances, preferring the loss of a train to a breach of good manners and the discomfort of being unpleasantly conspicuous during a stretch of three or four hours.
In summer the pet pastime of the boys of Dawson's Landing was to steal apples, peaches, and melons from the farmer's fruit wagons-- mainly on account of the risk they ran of getting their heads laid open with the butt of the farmer's whip.
But my fears for Magdalen do not begin and end with the risk she is running at present.
For the rich and the poor to marry is to risk, terribly risk, the very thing they would marry for --their love.
But if I were sure they were raving--as I am morally certain one, at least, of them is down with fever--I should leave this camp, and at whatever risk to my own carcass, take them the assistance of my skill.
But for a man to come in the ordinary course of things to be a good soldier costs him all the student suffers, and in an incomparably higher degree, for at every step he runs the risk of losing his life.
Nor has any satisfactory reason been yet assigned for incurring that risk.
If his servant was a prisoner, ought he not to risk everything to rescue him from the Indians?
The peculiar risk lay in the possibility of my finding some substance in the space which I, or the machine, occupied.
Yes," replied Anne, "but you know why and how I see you; because, insensible to all my sufferings, you persist in remaining in a city where, by remaining, you run the risk of your life, and make me run the risk of my honor.