risk

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Risk

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.

Risk

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.

risk

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.

Risk.

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.

risk

see UNCERTAINTY AND RISK.

risk

Uncertainty regarding the possibility of loss.

References in periodicals archive ?

But is this association because risk-taking is indeed a masculine characteristic?

Neither Fish, Nor Peacocks, Nor Elephant Seals

This dynamics further empowers the risk-taking characteristics of the acquirer, as higher the acquirer's risk-taking ability, the more it will be willing to hold out to purchase the target firm.

Pricing mergers & acquisitions using agent-based modeling

Our second objective in conducting Study 2 was to test the robustness of the envy effect on risk taking using the dependent measure of financial risk taking, instead of the recreational risk-taking measure used in Study 1.

Envy takes you further: the influence of benign envy on risk taking

These two studies further find that the influence of RBC regulatory pressure on the risk-taking behavior of the two bank groups appears asymmetric.

The relationship between regulatory pressure and insurer risk taking

One way to overcome the limitations of self-report methods for assessing SRBs is to use laboratory methods that evoke risk-taking decisions in a real-time fashion that also control for as many extraneous variables as possible, maximize internal validity, and provide opportunities for experimental work that is not feasible using most self-report methods.

Risk taking for sexual versus monetary outcomes using the Balloon Analogue Risk Task

Family affluence is correlated with risk taking: those in the most affluent groups are less likely than others to engage in risk-taking behaviour.

Hundreds of our kids on booze and fags; Nearly one in five girls are smoking says report

Specifically, as diversification risk increases, so should the incentive for employees to mitigate risk-taking at work.

Thinking: Toronto Rotman School of Management on the Bright side of diversification risk

An important strand of the literature on risk-taking in tournaments examines the impact of revealed heterogeneity of agents on risk-taking (either right from the start of the tournament or at an intermediate stage).

Incidence and consequences of risk-taking behavior in tournaments--evidence from the NBA

Individuals have different risk-taking propensities, with some--both adults and children--more inclined to take risks than others.

Protecting children or creating vulnerability?

This indicates that the genesis and outbreak of the recent financial crises was associated with a deterioration of financial stability, and with the worsening of banking risk-taking.

Estimando el riesgo y el exceso de riesgo tomado por los bancos comerciales colombianos

Risk-taking is defined as the perceived probability of receiving rewards associated with the success of a situation that is required by individuals before they will subject themselves to the consequences associated with failure (Brockhaus, 1980).

Dispositional antecedents, job correlates and performance outcomes of entrepreneurs' risk taking

The workshops focused on integrating information across disciplines and discussed the prevalence and nature of adolescent risk-taking in sex, substance use, criminal behavior, and risky driving, and the potential contributions of neural, biological, intellectual, and socioemotional development; interpersonal, institutional, and contextual influences on risk behavior and how this can inform prevention, health promotion, and treatment interventions; and implications for policy and practice.