Risky asset

Risky asset

An asset whose future return is uncertain.

Risky Asset

An investment with a return that is not guaranteed. Assets carry varying levels of risk. For example, holding a corporate bond is generally less risky than holding a stock. Government bonds are generally not considered risky assets. A risky asset should not be confused with a risk asset.
References in periodicals archive ?
We have participants allocate their investment capital between an asset with a sure return and a risky asset with a higher expected rate of return.
Kuwaiti banks are coming under increased stress due to contraction in the local economy and exposure to risky asset classes, Fitch said in a special report.
If you do take the [allocation to] risky asset classes down, you'll run into a situation where you need more contributions from the company," he says.
Portfolio theory in finance has a focus on the risky asset proportion of investments, with the optimal proportion of risky assets for a household depending on its risk aversion level.
If the people making investment decisions borrow money, they are only interested in the upper part of the distribution of payoffs of the risky asset because of the possibility of default.
In addition, a tobit regression model was employed with the risky asset share variable used as the dependent variable and the same set of independent variables used in the logistic regression model.
All parties generally agree, as I have noted, that private equity is a risky asset.
Figure 2 analyzes the nature of risky asset price exposures.
The risk-averse individual must optimize decisions regarding consumption, saving, and how to allocate savings between a risky asset, a risk-flee asset, and annuities.
It can be shown that the individual's problem is the same every period t and that the share of wealth he or she invests in the risky asset is a constant [[rho].
But over a three-year horizon, the risky asset acquisitions of the summer of 2008 may be fondly recalled.
Finally, the amount allocated to the risky asset (usually called the exposure) is determined by multiplying the cushion by a predetermined multiple.