risk profile

Risk profile

The slope of a line graphed according to the value of an underlying asset on the x-axis and the value of a position exposed to risk in the underlying asset on the y-axis. Also used with changes in value. See: Payoff profile.

Risk Profile

1. A measure of how risk averse an investor is. One may conduct a risk profile to determine what securities will likely fit an investor's investment goals.

2. In options, a chart showing the profits and losses on a contract over time. It is created by plotting the value of the underlying asset on the x-axis and the risk on the y-axis. It is also called a payoff profile.

risk profile

The degree to which various risks are important to a particular individual.
What questions should I ask myself as I prepare to develop my risk profile?

Ask yourself when you plan to use your investment—in a few years to buy a home, start a business, or pay for college, or in the future for retirement. After you have decided how long your money will work, the focus of your preparation should shift to personal preferences:

  1. Is capital preservation more important to you than outpacing inflation?
  2. Are you willing to accept fluctuating values when investing for the long term?
  3. Are you more comfortable with dividends and income, or with growth through capital appreciation?
  4. Will you accept above-average risk to generate above-average returns?

Mark G. Steinberg, President, Trabar Associates, Boston, MA
References in periodicals archive ?
These continuing improvements to the risk profile of the company could, in due course, lead us to reassess our view of Warba's risk position, which we currently regard as moderate, and its enterprise risk management (ERM), which we currently classify as weak.
Each fund is available through AXA Wealth's standalone products - the Retirement Wealth Account, Investment Bond and Trustee Investment Plan - and has a different asset allocation, based on its risk profile.
While PMG exhibits continued strong capital strength, its risk profile is compromised as a captive for Sony Corporation.
The ratings mirror Aquatech group's above-average financial risk profile and its established position in the fabrication industry.
After completing a risk profile and developing a thorough risk map, risk managers can better understand how their organizational risks interact and how to address those risks.
A physician discussing the risk profile could then ask, "Which one do you want to tackle first?
An incident is a set of events or conditions that requires a response and closure in order to restore an appropriate risk profile.
Ideally, a company's financial-management infrastructure includes the articulation of the company's risk/return propensity and financial objectives, an understanding of the risk profile of the assets and liabilities and procedures for measuring the performance of the assets and liabilities.
INFOGEN provides to the patient for a subscription fee a personal genetic risk profile for a given medical condition and, if the patient so wishes, to his or her personal physician.
In some cases, assessments of LTCM's creditworthiness was found to be less than adequate as a result of limited information on the fund's true risk profile and risk-management capabilities.
Looking at a person's overall risk profile may be better than only screening for high blood pressure to determine who will go on to develop heart disease, researchers said.