Economics

Economics

basics of economics

Industry: Economy

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Economics

Risk averse

Economy; Economics

Someone who thinks risk is a four-letter word. Risk-averse investors are those who, when faced with two investments with the same expected return but two different risks, prefer the one with the ...

The process of bearing the risk you want to bear, and minimising your exposure to the risk you do not want. This can be done in several ways: not doing things that carry a particular risk; hedging; ...

Risk neutral

Economy; Economics

Someone who is insensitive to risk. Risk-neutral investors are indifferent between an investment with a certain outcome and a risky investment with the same expected returns but an uncertain outcome. ...

Risk premium

Economy; Economics

The extra return that investors require to hold a risky asset instead of a risk-free one; the difference between the expected returns from a risky investment and the risk-free rate. (See equity risk ...

Risk seeking

Economy; Economics

Someone who cannot get enough risk. ¬Risk-seeking investors prefer an investment with an uncertain outcome to one with the same expected returns and certainty that it will deliver them.

Safe harbour

Economy; Economics

Protection from the rough seas of regulation. Laws and regulations often include a safe harbour clause that sets out the circumstances in which otherwise regulated firms or individuals can do ...

Satisficing

Economy; Economics

Settling for what is good enough, rather than the best that is possible. This may occur in any situation in which decision makers are trying to pursue more than one goal at a time. Classical ...