risk profile

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Risk profile

The slope of a line graphed according to the value of an underlying asset on the x-axis and the value of a position exposed to risk in the underlying asset on the y-axis. Also used with changes in value. See: Payoff profile.

Risk Profile

1. A measure of how risk averse an investor is. One may conduct a risk profile to determine what securities will likely fit an investor's investment goals.

2. In options, a chart showing the profits and losses on a contract over time. It is created by plotting the value of the underlying asset on the x-axis and the risk on the y-axis. It is also called a payoff profile.

risk profile

The degree to which various risks are important to a particular individual.
What questions should I ask myself as I prepare to develop my risk profile?

Ask yourself when you plan to use your investment—in a few years to buy a home, start a business, or pay for college, or in the future for retirement. After you have decided how long your money will work, the focus of your preparation should shift to personal preferences:

  1. Is capital preservation more important to you than outpacing inflation?
  2. Are you willing to accept fluctuating values when investing for the long term?
  3. Are you more comfortable with dividends and income, or with growth through capital appreciation?
  4. Will you accept above-average risk to generate above-average returns?

Mark G. Steinberg, President, Trabar Associates, Boston, MA
References in periodicals archive ?
Contract notice: Locating a manager of the assets of the structure and the resulting risk profiles and investment compatible with the specialties and the duration of the investment.
We could revise the outlook to stable if Warba fails to build on recent improvements in its ERM practices, or if either its business risk or financial risk profiles deteriorates from current levels, for example, because of lower-than-expected earnings or a continuing very high exposure to equity instruments.
Additionally, insurers are expected to demonstrate that their risk management processes are appropriate for their risk profiles.
Furthermore, the capital markets are so stacked with competition that returns, when weighed against risk profiles, have shrunk markedly from where they were only a few years ago.
Giving patients with diabetes printed reports with individualized cardiovascular risk profiles helped the patients improve their cholesterol levels in a randomized study.
Customers can tailor the system with specific risk profiles for each part of their business to ensure the business impact analysis is uniquely relevant to their individual needs.
Factors such as serviceability, home equity, and interest margins, commensurate with the risk profiles of the borrowers, have been used by the originator to counter the credit risk profile of the pool.
Although not directly focused on the issue of hedge funds, international efforts to enhance public disclosure of financial institution risk profiles may also provide meaningful input.
From an operational perspective, then, managers should continually assess the relative importance to the overall organization of output - or potential revenues - from operations in countries with significant risk profiles.
L&G s Strategic Investment and Risk Management team will dynamically manage the funds asset allocation mix on an ongoing basis whilst ensuring the funds stay within the target risk profiles.
OncorMed has been established to provide genetic risk profiles to the healthcare community, utilizing recent, new genetic discoveries," said Stephen Turner, Oncor's Chairman and Chief Executive Officer.
As we move forward with specific projects and review new ones, we continually assess and update multiple risk profiles on each project to determine the project's fit in our overall business plan.