risk aversion

(redirected from Risk-tolerant)
Also found in: Dictionary.

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.

risk aversion

The tendency of investors to avoid risky investments. Thus, if two investments offer the same expected yield but have different risk characteristics, investors will choose the one with the lowest variability in returns. If investors are risk averse, higher-risk investments must offer higher expected yields. Otherwise, they will not be competitive with the less risky investments.

risk aversion

the tendency for managers, consumers and other decision-makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.

risk aversion

the tendency for managers, consumers and other decision makers to avoid undertaking risks and to choose less risky alternatives. See RISK PREMIUM.
References in periodicals archive ?
The primary risk to the investor is the failure of RIGS to become commercialized and, although RIGS should have been approved by the FDA long ago, we believe this risk currently translates into a Strong Speculative Buy for risk-tolerant investors.
ERA) announced today that it has raised its investment recommendation on CareDecision Corporation (OTCBB-CDED) to Aggressive Buy (suitable for risk-tolerant portfolios).
com as an Aggressive Buy Recommendation for risk-tolerant investors.
Our experience indicates that we can expect a substantial number of risk-tolerant individual and corporate investors to express interest in a project of this magnitude.
PMED:NASDAQ) with a "Speculative Buy" rating for risk-tolerant investors.
Directed at risk-tolerant, aggressive investors who are particularly interested in the technology sector, AIM New Technology Fund will be managed by David P.
We strongly recommend risk-tolerant investors consider investing today in anticipation of the growth of the industry.
In contrast, the Get Rich Quick segment consists of young, highly risk-tolerant investors with a mean net worth of less than $40,000.
The Get Rich Quick segment -- highly risk-tolerant investors who make frequent trades in pursuit of quick gains -- focused on low commissions and high transaction confidence.