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The Risk Curve for Capital Markets
The way that we can quatify a capital market is by plotting the different financial instruments in the inset capital market based on their risk profile. We have a return on the y axis and risk on the x axis. As you plot these instruments against one another, you have lower risk profiles at the bottom of the curve all the way up to very, very high associated risk at the top end of the curve. And this is a a pretty easy way of visualizing risk in any capital market ht dealing with.