Business and Personal Finance Dictionary

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• RISK RATIO
  
  Some investors and financial analysts try to estimate the risk an investment poses by speculating on how much the investment is likely to increase in value as opposed to how much it could decline. For example, a stock priced at $50 that analysts think could increase to $90 or decrease to $30 has a 4:2 risk ratio (the stock could go up $40 but down $20).
  
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