Marginal Risk

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Marginal Risk

The risk that the holder of a forward contract will declare bankruptcy before the contract matures. In such a case, the holder may not have sufficient funds to actually take possession of the underlying asset.
References in periodicals archive ?
However, by letting [LAMBDA] vary we obtain marginal risks that are more heavily tailed and that are interrelated.
We provide evidence that adding information on the distribution of marginal risks does not lead to significant reduction of the bounds.
In some cases, it enables the insurer to entertain marginal risks with a good insurance score.
The underwriter still might decide to accept a marginal risk but specify that it be priced according to published rates;
So a stronger loan--say $100,000 to expand an up-and-running business--would make it easier to take marginal risks. To cover the risk, the bank, the borrower, and the government pay a small percentage between 1.5 to 3.5 percent of the loan amount into a reserve fund.
"If all you needed to do is point to some marginal risk," he wrote, "then this Court should have struck down the 24-hour waiting period in the Casey decision, because the plaintiffs there said the 24-hour waiting condition has imposed significant risks.