risk

—risker, n. —riskless, adj.

/risk/, n.

1. exposure to the chance of injury or loss; a hazard or dangerous chance: It's not worth the risk.

2. Insurance.

a. the hazard or chance of loss.

b. the degree of probability of such loss.

c. the amount that the insurance company may lose.

d. a person or thing with reference to the hazard involved in insuring him, her, or it.

e. the type of loss, as life, fire, marine disaster, or earthquake, against which an insurance policy is drawn.

3. at risk,

a. in a dangerous situation or status; in jeopardy: families at risk in the area of the weakened dam.

b. under financial or legal obligation; held responsible: Are individual investors at risk for the debt part of the real estate venture?

4. take or run a risk, to expose oneself to the chance of injury or loss; put oneself in danger; hazard; venture.

v.t.

5. to expose to the chance of injury or loss; hazard: to risk one's life.

6. to venture upon; take or run the chance of: to risk a fall in climbing; to risk a war.

[1655-65; < F risque < It risc(hi)o, of obscure orig.]

Syn. 1. venture, peril, jeopardy. 5. imperil, endanger, jeopardize. 6. chance.

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In economics and finance, an allowance for the hazard (risk) in an investment or loan.

Default risk refers to the chance that a borrower will not repay a loan. If a banker believes that a borrower may not repay a loan, the banker will charge the true interest plus a premium for the default risk, the premium depending on the degree of presumed risk. All stock investment carries an implicit risk since there is no guarantee of return on investment. Trading or variability risk is the amount that the return may vary, up or down, from the expected return on investment.

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▪ finance

      in economics and finance, an allowance for the hazard or lack of hazard in an investment or loan. Default risk refers to the chance of a borrower's not repaying a loan. If a banker believes that there is a small chance that a borrower will not repay a loan, the banker will charge the true interest plus a premium for the default risk, the premium depending on the degrees of presumed risk.

      All stock investment carries an implicit risk, as there is no guarantee of return on investment. Thus, trading or variability risk is the amount that the return may vary, up or down, from the expected return from investments.

      Most individuals want to minimize their exposure to risk (a phenomenon known as risk aversion). The economy as a whole, however, encourages risk-taking behaviour because innovation, while risky, propels economic growth. Various institutions allow individuals to manage risk, usually by transferring it to or pooling it among willing participants. One of the most important sectors of the market for risk is the insurance industry, which sells to individuals protection from the financial risk of specified unfortunate events, such as illness and accidents.

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