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Risk Assessment

Risk Assessment
The process of determining the likelihood that a specified negative event will occur. Investors and business managers use risk assessments to determine things like whether to undertake a particular venture, what rate of return they require to make a particular investment and how to mitigate an activity’s potential losses.

Examples of formal risk assessment techniques and measurements include conditional value at risk-cVaR (used by portfolio managers to reduce the likelihood of incurring large losses); loan-to-value ratios (used by mortgage lenders to evaluate the risk of lending funds to purchase a particular property); and credit analysis (used by lenders to analyze a potential client’s financial data to determine whether to lend money and if so, how much and at what interest rate).


Investment dictionary. . 2012.

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  • risk assessment — (in psychiatry) an assessment of the risk that a patient may pose at a given time, which is part of every mental state examination. Risk assessments are based primarily on past behaviour and certain aspects of current behaviour. They are usually… …   The new mediacal dictionary

  • risk assessment — The identification and assessment of hazards (first two steps of risk management process) …   Military dictionary

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