What is Risk Averse? Definition of Risk Averse, Risk Averse Meaning - The Economic Times (2024)

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Economy


Definition: A risk averse investor is an investor who prefers lower returns with known risks rather than higher returns with unknown risks. In other words, among various investments giving the same return with different level of risks, this investor always prefers the alternative with least interest.

Description: A risk averse investor avoids risks. S/he stays away from high-risk investments and prefers investments which provide a sure shot return. Such investors like to invest in government bonds, debentures and index funds.

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      Risk implies future uncertainty about deviation from expected earnings or expected outcome.

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