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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 ?
Table 2 provides the same information for RISKTAKER.
The skills required to be a successful Risktaker are very different from those required to be a Surgeon, and the training must focus on these differences and not on generic leadership characteristics.
Nordgren (2006), progressive Swedish educators observed 14 Florida elementary schools and discovered that students who developed their own learning were required to be both creative and risktakers.
The political, religious, and environmental chains that have locked the minds of Russian managers may no longer be strong enough to hold back these risktakers.
Constructivist theories suggest that the importance of environment and communication be stressed in mathematics learning (vonGlasserfeld 1990) and that attention be focused on helping students to become risktakers (McLeod 1991; Walen 1993).
1992), Elistics, Risktakers and Rugged Individualists?
She wondered whether the minimalist approach would be equally helpful to learners with various learning styles, so she challenged Carroll's implicit assumption that all learners are equally active, just as did Redish (1987), who found that there are readers and nonreaders, risktakers and those who want to have their hands held.
The risktakers (the insurer and the entrepreneur) have similar functions and incentives.
Bryan's students feel they can be risktakers and know that they will not be ridiculed for incorrect answers.
Miles Plumb, Birminghambased Director, Wealth Manager with Coutts, says risktakers across the region are optimistic of a upturn from the worst ravages of the 2008-09 rececssion.
Risktakers are picking up stocks and lapping up the public issues lined up in the rising market.
True virtue is to buy at the bottom and the real risktakers recognise this is more or less now.