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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 ?
We leave the analysis of the effects of crop price risks and the presence of instruments for mitigating risks associated with conventional crop production on the riskiness of producing energy crops to future research.
171) received substantially more support than did the constructs for riskiness (p = 0.
During the first stage, the auditor appraises the client's riskiness and the anticipated yields from the audit engagement and checks whether the expected risk/return ratio meets the audit firm requirements.
Plainly, the perceived riskiness of ventures will affect the amount of precautionary assets which businessmen will think it necessary to carry.
A variety of methods are being used to measure riskiness of banks currently, although efforts to arrive at a common methodology have been going on for a long time.
Regulators would now have to learn, and get familiar with, the variety of internal risk management models being used by banks in those markets, as a basis for identifying the riskiness of bank portfolios and assessing the adequacy of the treatment of these risks on the part of the management of the banks.
It has taken three years, but the nation's banking regulators have now made a good proposal to remove the raters as the official arbiters of financial reliability and replace them with a set of objective, transparent criteria to determine the riskiness of assets in the trading portfolios of the nation's 30 biggest banks.
that the importance and riskiness of the film and the topics it covers makes it
Another example of the riskiness of bank M&A in Russia is provided by the integration challenges at MDM Bank, which merged with URSA Bank at the peak of financial crisis.
Apparently riskiness doesn't always equate to box office success.
The differences can also trace to differences in the models used by each of the credit bureaus, which arise as the companies compete for business and try to distinguish themselves with scores that predict consumers' riskiness more accurately.
The company typically buys most of its new facilities, and it became concerned that the discount rates did not fully reflect the riskiness of each project, given the perils confronting different areas, from political instability to the real estate ramifications of new laws or taxes.