What Is Risk Management? In the financial world, risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions. Essentially, risk management occurs when an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment, such as a moral hazard, and then takes
What Are Risk Measures? Risk measures are statistical measures that are historical predictors of investment risk and volatility, and they are also major components in modern portfolio theory (MPT). MPT is a standard financial and academic methodology for assessing the performance of a stock or a stock fund as compared to its benchmark index. There
What Is Risk Neutral? Risk neutral is a concept used in both game theory studies and in finance. It refers to a mindset where an individual is indifferent to risk when making an investment decision. This mindset is not derived from calculation or rational deduction, but rather from an emotional preference. A person with a
What Are Risk-Neutral Measures? A risk neutral measure is a probability measure used in mathematical finance to aid in pricing derivatives and other financial assets. Risk neutral measures give investors a mathematical interpretation of the overall market’s risk averseness to a particular asset, which must be taken into account in order to estimate the correct price
What Is Risk-On Risk-Off? Risk-on risk-off is an investment setting in which price behavior responds to and is driven by changes in investor risk tolerance. Risk-on risk-off refers to changes in investment activity in response to global economic patterns. During periods when risk is perceived as low, the risk-on risk-off theory states that investors tend
Richard H. Anderson is an American businessman who has made a career out of helping companies in the transportation sector. His past career highlights include the CEO positions at Northwest Airlines and Delta Air Lines. In 2013, he was awarded the Tony Jannus Award for distinguished service in the commercial airline industry, and in 2015 was
Richard Stone was a Keynesian economist and pioneer in the development of systems of national accounting, for which he received the 1984 Nobel Prize in economics. Stone is the author of Input-Output and National Accounts, and Mathematical Models of the Economy and Other Essays. Richard Stone died on Dec. 6, 1991. Key Takeaways Richard Stone was
What Is the Richmond Manufacturing Index? The Richmond Manufacturing Index is a gauge of manufacturing activity in the Fifth Federal Reserve District published by the Federal Reserve Bank of Richmond. Key Takeaways The Richmond Manufacturing Index is an index of manufacturing activity in the Fifth Federal Reserve District, which covers Maryland, North Carolina, the District
What Is the RICS House Price Balance? The term RICS House Price Balance refers to a housing survey published by the Royal Institute of Chartered Surveyors (RICS) in the United Kingdom. The RICS House Price Balance is conducted monthly and is based on opinions about housing price trends from a sample of property surveyors based
What Is Riding the Yield Curve? Riding the yield curve is a trading strategy that involves buying a long-term bond and selling it before it matures so as to profit from the declining yield that occurs over the life of a bond. Investors hope to achieve capital gains by employing this strategy. As a trading
