Risky asset

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.
References in periodicals archive ?
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.
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.
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.
We also see an increase in the percentage of the least risky asset (0 percent risk weight).
(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).
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.
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.
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.
"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.
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.
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.
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.