risk profile

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 ?
3) Check the correct execution of the investment policies by measuring the existing risk and performance achievements, but report promptly to the organs of the APSP about yields, risk profiles and changes in the risk profile of the investments made and the context.
These continuing improvements to the risk profile of the company could, in due course, lead us to reassess our view of Warba's risk position, which we currently regard as moderate, and its enterprise risk management (ERM), which we currently classify as weak.
Global Banking News-September 25, 2013--Vietnamese risk profile to remain weak, says Fitch(C)2013 ENPublishing - http://www.
The draft is updated to include additional events that have contributed to the increased level of risk and uncertainty in the insurance industry, as well as a more detailed explanation of how an insurer's risk profile and risk management capabilities impact the rating process.
In this study, even people with a family history of heart problems were able to have a low cardiovascular disease risk profile if they started living a healthy lifestyle when they were young.
Clemens Mann, risk manager with Holcim's corporate strategy and risk management team, describes the process: "In this first element of the business planning process, we look at the risk profile in each of our group companies, and examine how the business environment has changed or might change in the future.
The present construction lending market, flush with capital, may be great for developers, but for lenders it means tapering returns at a time when the risk profile for some development could be increasing.
A physician discussing the risk profile could then ask, "Which one do you want to tackle first?
The interagency paper specifically addresses what operations are critical for financial markets (core clearing and settlement organizations) but other organizations must evaluate their own risk profile to determine what operations and activities are the most critical--and which need to be restored quickly--in the event of a disruption.
An incident is a set of events or conditions that requires a response and closure in order to restore an appropriate risk profile.
Ideally, a company's financial-management infrastructure includes the articulation of the company's risk/return propensity and financial objectives, an understanding of the risk profile of the assets and liabilities and procedures for measuring the performance of the assets and liabilities.
INFOGEN provides to the patient for a subscription fee a personal genetic risk profile for a given medical condition and, if the patient so wishes, to his or her personal physician.