risk

(redirected from run risks)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.

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 ?
As he told the House of Commons in July 1942, near the very low point of the Allied effort, "you will not get generals to run risks unless they feel they have behind them a strong government" The fastest way to repair the relationship between the U.
You have to be able to run risks and be creative to build a desire in kids to communicate with you" he argues.
He focuses on authors who 'were prepared to run risks and who thereby extended the parameters within which GDR prose was allowed to move'.
Not only do they become inebriated more quickly, but women also run risks men do not, such as breast cancer and damage to unborn children, often called fetal alcohol syndrome.
Both are willing to run risks a lot more hazardous than comparisons with a TV actor for the sake of PNB's dancers.
Long Run Risks, the Macroeconomy, and Asset Prices," American Economic Review: Papers & Proceedings, 100, 542-546.
Campbell, "The Long Run Risks Model and Aggregate Asset Prices: An Empirical Assessment," NBER Working Paper No.
Sometimes we take the bravery of jump jockeys for granted as they run risks in the course of a single afternoon which most sportsmen don't take in a lifetime.