Legal Definitions - risk-averse

Definition: Risk-averse is an adjective used to describe a person who is uncomfortable with volatility or uncertainty and is not willing to take risks. They are very cautious in their decision-making process.

Example: A risk-averse investor is someone who prefers to invest in low-risk options such as bonds or mutual funds rather than high-risk options like stocks or cryptocurrencies.

Explanation: The example illustrates the definition of risk-averse as it shows how a person who is risk-averse would make investment decisions. They would choose low-risk options to avoid any potential losses or volatility in the market.

Additional Example: A risk-averse person may choose to save their money in a savings account rather than investing it in the stock market. They may also prefer to take a steady job with a stable income rather than starting their own business.

Explanation: This example further illustrates how a risk-averse person would make decisions in different aspects of their life. They would choose options that provide stability and security rather than taking risks that could potentially lead to losses or uncertainty.