Risk-averse


Also found in: Dictionary.
Related to Risk-averse: Risk neutral

Risk-averse

Describes an investor who, when faced with two investments with the same expected return but different risks, prefers the one with the lower risk.

Risk Aversion

The subjective tendency of investors to avoid unnecessary risk. It is subjective because different investors have different definitions of unnecessary. An investor seeking a large return is likely to see more risk as necessary, while one who only wants a small return would find such an investment strategy reckless. However, most rational economic actors are sufficiently risk averse such that, given two investments with the same return and different levels of risk, they would choose the less risky investment.
References in periodicals archive ?
A risk-averse individual would prefer to receive a relatively lower return to avoid a potential huge loss.
In the long term, the greatest risk investors run is remaining risk-averse for too long, building portfolios based on short-term phenomena, not long-term realities, and therefore falling well-short of their goals.
Failure to reach consensus on such a mechanism would result in continued risk-averse behavior by transplant centers undermining innovation and hampering advancement of the field of transplantation and ultimately compromising patient care.
Although we must all take a responsible approach to lending, that doesn't mean becoming so risk-averse that we simply exclude millions of creditworthy consumers.
You were widely seen as being fired for being risk-averse.
From the perspective of the risk-averse producer, shocks can only have an adverse (or at best neutral) effect (a reduction in output, etc.
Lord Jones - who previously headed the CBI as Digby Jones - told Sky News Sunday Live: "I have never met a more risk-averse system in my entire life than the Civil Service.
A RISK-AVERSE culture in the Civil Service is inhibiting the Government's response to the current global financial crisis, outgoing trade minister Lord Jones warned yesterday.
Rule-bound and risk-averse in so many ways, Germans regard driving at face-peeling speeds as an inalienable right.
It's really vibrant, and it's less risk-averse because there are so many players in here, so it's a really excellent time for Sudbury.
The foreign service is a risk-averse culture, Barbara Bergen, coordinator of the awards, tells Kralev, who reports that "[n]one of the nominations this year is related to a controversial foreign policy issue, such as Iraq, Iran, North Korea, or the Israeli-Palestinian conflict.

Full browser ?