risk

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Related to Specified risk materials: material risk, SRMS

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 ?
In January, USDA expanded the list of specified risk materials prohibited in the food supply as an additional firewall to prevent bovine spongiform encephalopathy (BSE).
12th, specified risk materials, those tissues or portions of the carcass likely to contain infectious agents, are being discarded.
David Byrne, EU commissioner for food safety, said the ram's horn the cromach's handle is traditionally made from should be treated as "specified risk materials" and destroyed.
"Following the further relaxation of the import restriction, deboned beef and bone in beef from cattle of all ages and offal, excluding specified risk materials and mechanically separated meat, are allowed to be imported from the UK.
It also said the current ban on specified risk materials (SRMs) should be retained.
cattle less than 30 months of age with all specified risk materials (SRMs) removed under the USDA Beef Export Verification (BEV) Program.
Japan lifted the ban two weeks earlier on the conditions that the beef comes from cows aged up to 20 months and that brains, spinal cords and other specified risk materials are properly removed.
Specified Risk Materials (SRM), such as brain and spinal cord, have had to be removed from all goats over the age of 12 months since 2001.
It involves any materials from downer cattle, any material from dead cattle, specified risk materials and mechanically separated beef, as announced by Tommy G.

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