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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson


Uncertainty regarding the possibility of loss.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Most of the participants felt that preventive dentistry is important and therefore, preventive measures should be practiced routinely.
Finally, another important specification is necessary: the length of imprisonment ordered by house arrest is not taken into account in calculating the maximum period of preventive arrest of the defendant during the prosecution, which means that when we talk of the hardest preventive measure (arrest) the rules of that institution apply.
Preventive Measure: Do not start floating and troweling until excess moisture has evaporated from the surface, and the concrete has started its initial set.
We will find them again when it comes to this last preventive measure, provided it had been established that taking this measure is sufficient to ensure smooth functioning of the criminal trial or preventing the defendant to escape prosecution or trial.
As per direction of Ministry of Interior, Capital Police have taken some preventive measures for safety of parked cars and motorcycle in Islamabad and these included enhanced patrolling direction to officers to conduct surprise checking at various check posts "Nakas".
The preventive measures include awareness campaign, spray at possible breeding of dengue larva and its growth.
Pamphlets containing preventive measures and instructions are also distributed amongst general public in different areas.
'Indeed, severe flooding has commenced in several parts of the country, causing loss of lives and property but if appropriate and early preventive measures are not implemented on time, this could lead to high records of deaths, destroyed property, family displacement, disease outbreaks, agro-economic downturn, and other negative effects associated with flooding.
"In anticipation of the period of celebrations for the month of August," stated the press release, "Bank Al-Maghrib has addressed a memo to banks and asked them to take all the necessary measures to ensure permanent availability of cash at ATMs across the country."The memo, which BAM says it sent on July 16, also urged banks to be vigilant in the implementation of the preventive measures "in order to avoid any potential dysfunction.
Stressing upon preventive measures, Deputy District Health Officer Dr Muhammad Ali Mirza advised to avoid going out unnecessarily in the sun from 10am to 5pm, and if they do, they must take preventive measures such as covering their heads, drinking ORS and water frequently to stay hydrated.

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