Under the European Union’s Solvency II directive, risk margin represents the potential costs of transferring insurance obligations to a third party should an insurer fail. It is equal to an insurer’s baseline solvency capital requirement for unhedgeable risks multiplied by the cost of capital at 6% and discounted at current interest rates.
Actions taken to lessen the probability or negative consequences, or both, associated with a risk.
Describes an investor who is indifferent between a sure cash flow and a risky one of the same expected value.
A qualified person, appointed by the board, with the appropriate responsibility and authority to oversee the implementation of the risk program
Risk parity is a quantitative style of portfolio asset allocation that adjusts the proportion of different asset classes in the portfolio based on their riskiness, usually defined by volatility, and the investor’s risk appetite. The aim of risk parity funds is to achieve better diversification than traditional 60/40 allocation strategies, by earning the best return […]
The subjective judgment that people make about the characteristics and severity of a risk. See also Risk, Risk assessment and Risk management.
Documentation of the risks involved in performing your business activities. Because any activity can have some risk involved, commercial cannabis businesses create a risk policy as a way of defining those risks. It should set the companies expectations of risks to be managed, who is ultimately responsible for management of the risks, and to what […]
Risk premia refers to the amount by which the return of a risky asset is expected to outperform the known return on a risk-free asset. Equity market exposure is the best-known risk premium, rewarding investors for taking exposure to long-only equity investments. Other risk premia include the size factor, where small-cap stocks tend to outperform […]
The percentage points that a risk-averse investor adds to the risk-free discount rate to account for risk in future revenues.
The outline of the entire risk landscape that is the catalogue, types, and potential effects of risks to which a commercial cannabis business is exposed
