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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Summary: Many banks offer MFs based on risk profile of clients
For these reasons, we continue to assess the company's business risk profile as satisfactory and its financial risk profile as moderately strong.
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.
Global Banking News-September 25, 2013--Vietnamese risk profile to remain weak, says Fitch(C)2013 ENPublishing - http://www.enpublishing.co.uk
It also upgraded Meralco's business risk profile as "fair," from its previous assessment of "weak," noting that the firm's dominant position in the local power distribution sector supported the company's business risk profile.
"In this study, even people with a family history of heart problems were able to have a low cardiovascular disease risk profile if they started living a healthy lifestyle when they were young.
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.
Clemens Mann, risk manager with Holcim's corporate strategy and risk management team, describes the process: "In this first element of the business planning process, we look at the risk profile in each of our group companies, and examine how the business environment has changed or might change in the future." To develop a truly comprehensive risk profile, Holcim analyzes both internal and external risk factors and external market situations to determine where to focus the business planning process and where the critical elements reside.
The present construction lending market, flush with capital, may be great for developers, but for lenders it means tapering returns at a time when the risk profile for some development could be increasing.
A physician discussing the risk profile could then ask, "Which one do you want to tackle first?" he said.