Risk-reward ratio

Risk-reward ratio

Relationship of substantial reward corresponding to the amount of risk taken; mathematically represented by dividing the expected return by the standard deviation.

Risk-Reward Ratio

The ratio of the standard deviation of an investment to its expected return. The higher the ratio is, the lower the return for the amount of risk one is taking. This can inform one's investment decisions. See also: Risk adjusted return on capital.
References in periodicals archive ?
There are certain asset classes that yield lower but fixed returns, such as low yielding bonds and fixed deposits while other investments have a much higher risk-reward ratio.
The risk-reward ratio for those who will not tender is simply not too favorable,' one stock broker said.
According to Adam Jepsen, the founder of FinancialSpreads, the UK trading company, this probably makes the risk-reward ratio of trading the UK referendum skewed against investors.
The risk-reward ratio, especially regarding financial, property or legal concerns, is not in your favour, so be prudent.
But the risk-reward ratio favours conservatism, however outrageously Cook's ultra-adventurous opposite number Brendon McCullum chooses to dangle the carrot.
Regardless of industry, businesses continue to balance the current challenging risk-reward ratio in creative ways to serve clients and grow profits.
Hales, however, is prepared to take a chance on the basis of what he sees as a feasible risk-reward ratio.
The risk-reward ratio for the Norwegian company is attractive for medium- to long-term investors, he added.
And the risk-reward ratio is even more appealing for a horse lower down the pecking order who might make a name for himself.
Nothing is guaranteed and the risk-reward ratio is low.
The PAO mandate is broad but should ultimately be defined by a positively skewed risk-reward ratio, as well as the practitioner's sector expertise and due diligence resources.