However, if an investment is viewed as higher risk, investors demand adequate compensation through a higher yield spread in exchange
for taking on the risk of their principal declining.
Some underwriters wo
n't take on a risk that's located above a dry cleaning shop, for instance, because of the nature of the chemicals involved and the increased danger of fire.
Your incentive or reward for
taking on this risk by investing your savings is the expectation of getting a «return» on your money.
If you will need the money in less than a year, keeping funds in a cash account is more appropriate than
taking on the risk inherent in investing in fixed income.
Please tell me why someone who has 45 + years of savings ahead of them needs to
take on ANY risks at all (above an inflation hedge)?
This applies to those
who take on the risks from such institutions when the decisions have to be made quickly on whether to buy them or not.
Even though we live in a time of economic recession, there are lenders who are willing to
take on the risk involved in lending to individuals with poor credit histories.
While the benefit of these funds can be great, it is important to understand you are
taking on the risk if your portfolio drops in value, not the brokerage firm.
Investors often view companies that
take on risk as dynamic and having potential for growth.
You
do take on some risk with attempting a vaginal delivery, but they are far fewer and less catastrophic when compared to the risks of a major abdominal surgery.
Sure I can keep the money earning.5 % interest, or I can invest in certain relatively stable or growing companies that pay dividends
while taking on some risk.
Investors willing to
take on this risk now may be rewarded with a nice combination of current income, income growth and capital appreciation.
When it comes to your intermediate - term goals, maybe money that you need out 10 or 15 years maybe you're
still taking on some risks still and some stocks.
A deposit is a refundable payment which is made to someone who is extending you credit or
otherwise taking on the risk of you not performing your obligations under the agreement.
It's up to freelancers to determine whether they are willing or
able take on that risk, based on their current income and time commitments.
Lenders
always take on risk when originating a mortgage loan, and some of these risks are even bigger when they're considering short - term financing.
Day trading, unlike long - term investing, can allow a trader to
take on a risk threshold in excess of what may be prudent for each trade.
Before a potential employer, lender, or
landlord takes on the risk of giving you something, they want to see evidence that you can handle it.
What the game does promise, however, is an
interesting take on risk and approach to the genre that is solely focused on scoring.
One of the biggest reasons for this is because life insurance companies are
essentially taking on risk when approving an applicant for their coverage.
Many advisers will ask you to take a questionnaire about your willingness to
take on risk such as this one.
It's very understandable that exchanges charge users fees — exchanges
take on risk by making markets, in addition to storing information, which requires energy and storage.
While we do our best to avoid such situations, investors can't enjoy the market's rewards
without taking on some risk and sticking with a strategy.
However, investors are still being rewarded
for taking on risk in many areas of equities and credit, especially given the poor compensation for risk in government bonds.
The traditional top - level law schools wo
n't take on the risks, so don't expect the innovation to come from them.
These specialty companies have experience in exactly that kind of underwriting and have balanced their book of business such that they're able to
take on the risk at a reasonable price.