Risk Ratio

Business / Taxes / Risk Ratio: Some investors and financial analysts try to estimate the risk an investment poses by speculating on how much the investment is likely to increase in value as opposed to how much it could decline. For example, a stock priced at $50 that analysts think could increase to $90 or decrease to $30 has a 4:2 risk ratio, because they estimate the stock could go up $40 but down $20. Critics point out that it is impossible to provide an accurate estimate of future prices, rendering risk ratios meaningless.

Other Words for Ratio

Ratio Adverb Synonyms: proportion, relationship, correlation, correspondence

Other Words for Risk

Risk Noun Synonyms: danger, peril, jeopardy, hazard, chance, gamble

Market Price Of Risk

Business / Finance / Market Price Of Risk: A measure of the extra return, or risk premium, that investors demand to bear risk. The reward-to-risk ratio of the market portfolio. MORE

Political Risk

Business / Finance / Political Risk: Possibility of negative events such as expropriation of assets, changes in tax policy, restrictions on the exchange of foreign currency, or other changes in the business climate of a country. MORE

Portfolio Separation Theorem

Business / Finance / Portfolio Separation Theorem: Theory that an investor's choice of a risky investment portfolio is separate from his attitude towards risk. Related: Fisher's separation theorem. MORE