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capital risk

The risk, in a lending operation, that the capital amount of the investment may be less than its par value, even at maturity.

capital risk

capital risk   Reference library

The Handbook of International Financial Terms

Reference type:
Subject Reference
Current Version:
2005

... risk . The risks arising to a firm's capital from its...

capital risk

capital risk   Quick reference

A Dictionary of Accounting (5 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
26 words

... risk The risk, in a lending operation, that the capital amount of the investment may be less than its par value , even at...

capital risk

capital risk   Quick reference

A Dictionary of Business and Management (6 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
26 words

... risk The risk, in a lending operation, that the capital amount of the investment may be less than its par value , even at...

risk capital

risk capital   Reference library

The Handbook of International Financial Terms

Reference type:
Subject Reference
Current Version:
2005

... capital . Funds provided for uncertain investments, typically venture capital or risk arbitrage activities usually in the form of equity or equity-equivalents . Such capital is designed to earn a commensurate reward to the risks...

risk capital

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A Dictionary of Finance and Banking (6 ed.)

Reference type:
Subject Reference
Current Version:
2018

... capital 1. ( venture capital ) Capital invested in a project in which there is a substantial element of risk, especially money invested in a new venture or an expanding business. It is also used in buyouts by private equity firms and employee or management buy-outs ( see bimbo ). Risk capital is normally invested in the equity of the company in the hope of a high return; it is not a loan (but see shareholder debt ). 2. See capital at risk...

risk capital

risk capital   Quick reference

A Dictionary of Economics (5 ed.)

Reference type:
Subject Reference
Current Version:
2017
Subject:
Social sciences, Economics
Length:
102 words

...risk capital Capital which the owners are willing to invest in equity in new and untried projects, where there is a recognized chance that they will lose it. Venture capitalists are willing to take these risks if they expect that their successes will make sufficiently large profits to keep their average return positive, in spite of some losses. Venture capital may be provided by individuals who are almost or entirely risk-neutral , or by investment banks and other organizations which are large enough to be able to spread their investments sufficiently to...

risk capital

risk capital   Quick reference

A Dictionary of Accounting (5 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
80 words

... capital ( venture capital ) Capital invested in a project in which there is a substantial element of risk, especially money invested in a new venture or an expanding business. It is also used in buyouts by private equity firms and employee or management buy-outs ( see BIMBO ). Risk capital is normally invested in the equity of the company in the hope of a high return; it is not a loan (but see shareholder debt...

risk capital

risk capital   Quick reference

A Dictionary of Business and Management (6 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
80 words

... capital ( venture capital ) Capital invested in a project in which there is a substantial element of risk, especially money invested in a new venture or an expanding business. It is also used in buyouts by private equity firms and employee or management buy-outs ( see BIMBO ). Risk capital is normally invested in the equity of the company in the hope of a high return; it is not a loan (but see shareholder debt )...

capital at risk

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A Dictionary of Finance and Banking (6 ed.)

Reference type:
Subject Reference
Current Version:
2018

... at risk ( risk capital ) An assessment of the amount of an organization’s capital that needs to be set aside to cover worst-case losses in excess of the average. In banking, measures of capital at risk are used to calculate both capital adequacy requirements and certain performance metrics ( see risk-adjusted return on capital ). The concept is also important in insurance, where a provider’s capital at risk is effectively its buffer against losses in excess of the premiums collected. Capital at risk is generally calculated using a value-at-risk ...

capital at risk

capital at risk   Quick reference

A Dictionary of Accounting (5 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
52 words

... at risk A measure of possible worst-case losses in excess of the average that is used in banking to calculate both capital adequacy requirements ( see capital adequacy ratio ) and certain performance measures, such as risk-adjusted return on capital (RAROC). It is usually based on the value-at-risk ...

capital at risk

capital at risk   Quick reference

A Dictionary of Business and Management (6 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
63 words

... at risk An assessment of the amount of an organization’s capital that needs to be set aside to cover worst-case losses in excess of the average; it is used in banking to calculate both capital adequacy requirements and certain performance measures, such as risk-adjusted return on capital (RAROC). It is usually based on the value-at-risk methodology. See also Basle Accords...

risk-adjusted return on capital

risk-adjusted return on capital   Quick reference

A Dictionary of Finance and Banking (6 ed.)

Reference type:
Subject Reference
Current Version:
2018

...the level of risk taken. An increasingly popular variant is RORAC or return on risk-adjusted capital , which instead of economic capital uses a measure of capital at risk based on external capital adequacy requirements. RARORAC or risk-adjusted return on risk-adjusted capital combines the two...

risk-adjusted return on capital

risk-adjusted return on capital   Quick reference

A Dictionary of Accounting (5 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
93 words

...-adjusted return on capital ( RAROC ) A measure of the performance of units within a bank or financial organization, be they managerial units, products, distributional units, or such treasury-based units as trading desks. It was developed by Bankers’ Trust and the Bank of America in the 1980s. In its most common form RAROC allocates capital at risk to a unit and divides that into the return obtained from the unit. The capital is allocated in terms of a value-at-risk methodology. A refinement of this system is known as RAROC 2020...

risk-adjusted return on capital

risk-adjusted return on capital   Quick reference

A Dictionary of Economics (5 ed.)

Reference type:
Subject Reference
Current Version:
2017
Subject:
Social sciences, Economics
Length:
103 words

...risk-adjusted return on capital ( RAROC ) A method of comparing returns on different investments taking account of risk . The actual return is adjusted by measuring how the assets held are exposed to risk, and adjusting downwards the returns on riskier assets. How useful RAROC is depends on how accurately the riskiness of different assets can be assessed, and on how well the penalties on riskier assets reflect the degree of risk aversion of any given investor. For new types of assets, such as derivatives , risk assessment is highly uncertain in advance...

risk-adjusted return on capital

risk-adjusted return on capital (USA)   Reference library

The Handbook of International Financial Terms

Reference type:
Subject Reference
Current Version:
2005

...-adjusted return on capital ( RAROC ) (USA) . A risk -reward technique initially used by Bankers Trust Inc. and subsequently adopted by other financial institutions to measure its exposure in relation to the return on a line of business and the amount of the bank's capital it needed to (notionally) allocate to each activity. Introduced in the early 1980s, it has been significantly developed since. The basic concept is to evaluate all of the bank's operations using a common risk method based on volatility . This is taken to be the price movement...

risk-adjusted return on capital

risk-adjusted return on capital   Quick reference

A Dictionary of Business and Management (6 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
90 words

...-adjusted return on capital ( RAROC ) A measure of the performance of units within a bank or financial organization, be they managerial units, products, distributional units, or such treasury-based units as trading desks. It was developed by Bankers’ Trust and the Bank of America in the 1980s. In its most common form RAROC allocates capital to a unit and divides that into the return obtained from the unit. The capital is allocated in terms of a value-at-risk methodology. A refinement of this system is known as RAROC 2020...

risk capital

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Oxford Dictionary of English (3 ed.)

Reference type:
English Dictionary
Current Version:
2015
Subject:
English Dictionaries and Thesauri
Length:
11 words
risk capital

risk capital noun   Reference library

The Canadian Oxford Dictionary (2 ed.)

Reference type:
English Dictionary
Current Version:
2005
Subject:
English Dictionaries and Thesauri
Length:
8 words
risk capital

risk capital noun   Quick reference

New Oxford American Dictionary (3 ed.)

Reference type:
English Dictionary
Current Version:
2015
Subject:
English Dictionaries and Thesauri
Length:
15 words
capital risk

capital risk  

The risk, in a lending operation, that the capital amount of the investment may be less than its par value, even at maturity.

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