Definition Of Risk Averse

Risk aversion is a low tolerance for risk taking.

Definition of risk averse. The term risk averse describes the investor who chooses the preservation of capital over the potential for a higher than average return. An investor seeking a large return is likely to see more risk as necessary while one who only wants a small return would find such an investment strategy reckless. Definition a risk averse investor is an investor who prefers lower returns with known risks rather than higher returns with unknown risks. Disinclined or reluctant to take risks.

An investor seeking a large return is likely to see more risk as necessary while one who only wants a small return would find such an investment strategy reckless. Unwilling to take risks or wanting to avoid risks as much as possible. Someone who is risk averse has the characteristic or trait of preferring avoiding loss over making a gain. It is subjective because different investors have different definitions of unnecessary.

Unwilling to take risks or wanting to avoid risks as much as possible. Risk is a probability of a loss. Definition of risk averse. This characteristic is usually attached to investors or market participants who prefer investments with lower returns and relatively known risks over investments with potentially higher returns but also with higher uncertainty and more risk.

The subjective tendency of investors to avoid unnecessary risk. In other words among various investments giving the same return with different level of risks this investor always prefers the alternative with least interest. It is subjective because different investors have different definitions of unnecessary. In investing risk equals price volatility.

Tending to avoid risks as much as possible. Generally speaking risk surrounds all action and inaction and can t be completely avoided.