Risky asset

An asset whose future return is uncertain.

Risky Asset

An investment with a return that is not guaranteed. Assets carry varying levels of risk. For example, holding a corporate bond is generally less risky than holding a stock. Government bonds are generally not considered risky assets. A risky asset should not be confused with a risk asset.

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Alternatively, the individual might be deciding on how to insure or how to otherwise hedge a risky asset. Often, such a decision is modeled in isolation, where there is only the one source of risk.

RISK-TAKING-NEUTRAL BACKGROUND RISKS

Although the new set of regulations are expected to improve the asset quality of UAE insurers Moody's said, even under the new rules UAE insurers can invest a substantial portion of their assets risky asset classes such as equities and real estate.

New regulations to strengthen asset quality and solvency of UAE insurance sector

This paper selects the Shanghai composite index as a risky asset investment portfolio (from January 02, 1997, to December 31, 2010), for the following reasons.

Model for dynamic multiple of CPPI strategy

We also see an increase in the percentage of the least risky asset (0 percent risk weight).

The changing composition of bank-holding company portfolios

(2) The CPPI strategy is based on a dynamic portfolio allocation on two basic assets: a riskless asset (usually a treasury bill) and a risky asset (a financial stock index for example).

CPPI method with a conditional floor

The second step, the so-called asset allocation decision, includes further selection of different classes of risky assets. The third step, the security allocation decision, entails the selection of specific securities to be held within each particular risky asset class selected.

How investors face financial risk: loss aversion and wealth allocation

We have participants allocate their investment capital between an asset with a sure return and a risky asset with a higher expected rate of return.

Portfolio choice and risk attitudes: an experiment

Kuwaiti banks are coming under increased stress due to contraction in the local economy and exposure to risky asset classes, Fitch said in a special report.

Kuwait banks under pressure

"If you do take the [allocation to] risky asset classes down, you'll run into a situation where you need more contributions from the company," he says.

Pensions hunker down: last year's market sell-off is encouraging corporate plan sponsors to lighten up on equities as they shy away from risk in general

Portfolio theory in finance has a focus on the risky asset proportion of investments, with the optimal proportion of risky assets for a household depending on its risk aversion level.

Changes in stock ownership by race/Hispanic status, 1998-2004

Uncertainty in the standard capital asset pricing model (CAPM) relates to the rate of return on each risky asset during each period; investors are taken to be concerned about the expected values and variances (and covariances) of the rates of return on risky assets.

Consumption, wealth, and indebtedness in the context of uncertainty: the consumption function meets Portfolio theory

If the people making investment decisions borrow money, they are only interested in the upper part of the distribution of payoffs of the risky asset because of the possibility of default.