Risky asset
An asset whose future return is uncertain.
Similar financial terms
Assets
Anything that the firm owns. In the balance sheet, assets are divided into intangible assets and tangible assets.
Risky asset
An asset whose future return is uncertain.
Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Risky Asset Exposure
Fraction of a fund's assets that is exposed directly or synthetically to a particular market risk, either though direct investment or through derivatives. Some funds may have minimum levels of risky asset exposure.
Risky asset
An asset whose future return is uncertain.
Risk-adjusted return
Return earned on an asset normalized for the amount of risk associated with that asset.
Risky asset returns are said to follow a factor structure if they can be expressed as:
where ...
Risky asset An whose future is uncertain.
Round lot A trading order typically of 100 of a stock or some multiple of 100. Related:
Round-trip transactions costs Costs of completing a transaction, including commissions, market impact costs, and taxes.
A more risky asset class would consist of higher returns on your investment. These are best for the long-term investor who is willing to ride out any dips in growth.
The portfolio of risky assets with lowest variance.
Minority interest
An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes.
Minus ...
It shows that the expected return on any risky asset is a linear function of a single factor. 144 stock Used in the context of general equities. Restricted stock.
Second, the exponential development of derivatives instruments has complicated the evaluation of the risky assets in any field of financial engineering, ...
Leveraged portfolio A portfolio that includes risky assets purchased with funds borrowed. Leveraged recapitalization Often used in risk arbitrage.
Why does the first strategy-underfunding and buying risky assets-make sense? Under federal law, a firm can terminate its pension plans without further cost only if the pension fund is greater than accrued benefits or if the firm is bankrupt.
The extra reward investors get for buying a SHARE over what they get for holding a less risky ASSET, such as a government BOND.
The never-ending dilemma for investors is to decide to what extent they should remain invested in risky assets when risk premiums have been eroded.
The expected additional return for investing in a riskier asset class over a less risky asset class. As an example, equities and corporate b...(Read more)
Risk Reversal ...
The expected return on a risky asset based on a probability distribution for the possible rates of return.
An investor might choose to invest a proportion of his or her wealth in a portfolio of risky assets with the remainder in cash - earning interest at the risk free rate (or indeed may borrow money to fund his or her purchase of risky assets in which ...
According to the theory the overall market (the entire market of stocks and bonds and other risky assets) is the most efficient portfolio.
(2) In the Capital Asset Pricing Model (CAPM), the optimum portfolio of risky assets for all investors. Graphically, it is located at the point of tangency of a line drawn from the risk-free rate of return to the efficient frontier of risky assets.
A market portfolio is an investment portfolio encompassing all risky assets. This is the most diversified portfolio of risky assets available to investors, and has a beta coefficient of one.
Market-related value of pension assets ...
The most direct way to place an economic value on a risky asset is to observe the value of that asset in the financial markets, ...
The resulting optimal portfolio is a full diversification with money invested in all of the risky assets. The benefits of diversification depend more on how the assets perform relative to one another than on the number of assets you want to invest.
EXPECTED RETURN - The expected return on a risky asset, given a probability distribution for the possib...
EXPECTED RETURN ON INVESTMENT - The return one can expect to earn on an investment. See: Capital asset ...
Treynor, Jack (1961). Towards a theory of market value of risky assets, unpublished manuscript.
Related Forum Discussions
CAPM & normal distribution 28 Jan 2005
Does portfolio theory assume asset returns are normally distributed?
An investor is distinguished from a speculator, who seeks to make quick, large gains from price increases on risky assets.
Correlation - A measure of the degree to which returns on two risky assets move in tandem. A positive correlation means the returns move together. A negative correlation means they vary inversely.
A portfolio that includes risky assets purchased with funds borrowed.
Personal Finance Headlines
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Minimum-variance portfolio
The portfolio of risky assets with lowest variance.
Minority interest
An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes.
Markets high on easy money and risky assets
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Short view: Central banks' exit strategy ...
A technique by which a fund's exposure to a risky asset class, eg. equities or foreign currency, is adjusted on a frequent basis, both to avoid losses where the particular asset falls in value, ...
Minimum-variance portfolio
Definition: [crh] The portfolio of risky assets with lowest variance.
This has helped Islamic banks avoid the risky asset classes responsible for the sub-prime meltdown. (Source: Global Finance, "Sharing in Risk and Reward", June 2008; IHT, Islamic finance is seeing spectacular growth, November 5, 2007) ...
If RA(c) is constant for all c, and there are only two possible investments, a risky one and a risk-free one, the amount of investment in the one risky asset is constant for all c.
See also coefficient of relative risk aversion, which is cRA(c).
be sure you address the five financial risks that can derail your retirement: 1) underestimating longer life-spans; 2) neglecting to plan for health care costs; 3) failing to account for inflation; 4) adopting overly cautious or overly risky asset ...
Risk Aversion The dislike of risk. For risk averse investors, the pain from losing $1 is greater than the pleasure of winning $1. Thus, such investors have to be compensated with additional return to induce them to hold risky assets.
You should have a good idea of when you expect to cash in your investment. The longer you can afford to wait, the more time there is for the risks to be ironed out. Do not invest in risky assets if you may need funds in the short term.
Covariance is a measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means they vary inversely.
The difference between the interest rate on a risky asset and that on a safe one.
3. In exchange markets the difference between the forward rate and the expected future spot rate.
Rollback
1.
 See also: Expected return, Expense, Market portfolio, Asset pricing model, Capital asset pricing model
  
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