Risk ratio(redirected from RR)
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Some investors and financial analysts try to estimate the risk an investment poses by speculating on how much the investment is likely to increase in value as opposed to how much it could decline.
For example, a stock priced at $50 that analysts think could increase to $90 or decrease to $30 has a 4:2 risk ratio, because they estimate the stock could go up $40 but down $20.
Critics point out that it is impossible to provide an accurate estimate of future prices, rendering risk ratios meaningless.