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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 ?
* Overall, five of the top 10 riskiest shipping zip codes are located in Miami.
The changing trend is reflected in figures which show that in 2007 30.2% of all first-time buyers bought with the riskiest loans, by 2011 this had fallen to 1.7% but in 2013 the figure had doubled again to 3.5%.
It also recommends giving banking oversight authorities the power to require some of the biggest European banks - around 30 are potentially targeted - to isolate their riskiest activities in a separate entity (see Europolitics 4798).
Click through the following slides to see which dishes landed a spot on the top five riskiest meals to prepare.
According to Incisive, Locator uses flexible and configurable user-defined attributes and priorities, and helps organizations identify their riskiest spreadsheets and offers transparency into its calculations so its results are trustworthy.
For the big BHCs, the composition of the riskiest assets (100 percent risk weight) in their portfolios has been declining for almost all of the decade, and steadying since the crisis.
After Dubai, Doha, Muscat and Manama were the next least riskiest cities in the region.
Last year's winner of the Fireman's Fund award for riskiest movie was "Salt," a thriller in which star Angelina Jolie did her own stunts.
Last year's riskiest movie title went to "Salt," starring Angelina Jolie.
Accountability to shareholders is a prime factor in evaluating corporate governance--and the main reason one watchdog group recently listed two entertainment giants among the riskiest holdings for investors.
In its annual report published on February 28, Max Bank said 34 percent of its loans were related to the building and real estate industries, one of the sectors that the FSA has said is Denmark's riskiest.
According to a new member survey by global IT association ISACA, 61 percent of information technology leaders in the UK believe that any employee-owned mobile device poses a greater risk to the enterprise than company-supplied devices do, as opposed to 31 percent who said a mobile device supplied by the company is riskiest. When asked, "What is the riskiest behaviour you are aware of an employee doing with a mobile device that has access to the corporate network?", storing company data in an unsecured manner was reported as the riskiest by 48 percent of the respondents; losing the device was said to be the riskiest by 26 percent.