risky asset
/ˈrɪski æsɪt/ · ris·ky as·set
noun
- An investment or financial instrument that has a high potential for loss or volatility, but also offers the possibility of higher returns. The portfolio manager decided to diversify the investment portfolio by adding a mix of low-risk and high-risk assets, including a few risky assets that could potentially yield higher returns.
noun
- A financial instrument or investment that is subject to market fluctuations and may result in significant losses if not managed properly. The company's financial analyst warned the board of directors about the potential risks associated with investing in a risky asset, recommending a more conservative approach.
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Did you know? The concept of risky assets is closely related to the efficient market hypothesis, which suggests that financial markets are generally efficient and that it is difficult to consistently achieve returns in excess of the market's average.