Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

RISK ASSET

1. A bank asset that is affected by credit quality, repricing, interest rate changes etc. 2. Equity capital and assetsof a firm in trouble.

RISK ASSUMPTION

1. Law. Doctrine of negligence used in the defense of a personal injury suit. 2. Risk management. A practice of the absorption of minor losses but protecting against large and catastrophic losses.

RISK AVOIDANCE

A risk management technique taking steps to remove a hazard, engage in different activities or to end a certain exposure to risk.

RISK BASED TARGETING

Fund and other resource allocation to identified areas that have the highest potential or actual adverse impact.

RISK CHARACTERIZATION

1. Corporate. The component of risk assessment where risks have been ranked according to their severity and extent. 2. Food industry. According to WHO/FAO the integration of identification of hazards and the

RISK CLASSIFICATION

The grouping of risks by their likely impact or estimated costs, occurence and any measures required to counter them.

RISK COMMUNICATION

The effective communication between those who determine risks and those responsible for minimising and assessing the risks.

RISK CONDITION

The description of effects that might occur under assumptions of the planand its impact on resources that support the plan.

RISK CURVE

The display on a graph of 2 variables where financial reward is plotted against financial risk. The type of risk is also indicated.

RISK DIVERSIFICATION

The allocation of risk in proportion to all the parties of a contract. Also known as risk allocation.

RISK EQUIVALENT

The amount in dollars that represents any probable loss from a possible risk.

RISK ESTIMATION

1.An expression of duration, magnitude, intensity and raech of a potential risk in montary terms. 2. The probability that exposure to a substance wikll have an adverse effect on an organism.

RISK EVALUATION

A priority in risk management by the etsablishment of quantitative or qualitative relationships gthat exist between risks and benefits.

RISK EVENT

A single specific occurence that affects a plan or decision in a negative manner.

RISK FACTOR

A characteristic that is measurable that can affect the value of assets.

RISK FREE

The certain and known outcome of a transaction, investment or asset.

RISK FREE RETURN

1. Known with certainty. 2. The interest rate on a virtually free from risk investment.

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