low risk
[low risk|low risk] [low risk] refers to investments with low rate of return but high liquidity, typically showing actual returns that are fairly close to expected rates year after year.
Definition
low risk [low risk] refers to investments with low rate of return but high liquidity, typically showing actual returns that are fairly close to expected rates year after year.
Effects
low risk can lead to insurance companies facing a situation where low-risk parties avoid their policies due to high costs, while high-risk parties are attracted to them. This may result in drivers misrepresenting their risk status to access lower premiums.
Examples
low risk A bond issued by the U.S. government or a large corporation may seem to be relatively low risk. The issuer's promise to make certain payments over time contributes to this perception.