Risk Profile
Definition
What is Risk Profile?
An assessment of an investorA person or organisation that commits capital with the expectation of a financial return.'s ability and willingness to accept investmentAn asset or commitment of money made with the expectation of future income, growth, or both. losses and uncertainty.
Example in practice
How This Looks in Practice
An investor with stable income and a 15-year horizon may accept more equity risk than someone funding rent next month.
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Related Terms
Know Your Customer
The identity and due-diligence checks a financial institution performs before serving an investor.
Investor TermsTime Horizon
The expected period before invested money will be needed.
Investor TermsLiquidity
The ease and speed with which an investment can be converted into cash without a major price concession.
Tax TermsWithholding Tax
Tax deducted at source from specified income payments before the recipient receives the balance.