Risk Assets

Risk assets refer to financial assets that carry a significant degree of risk due to their potential for price volatility or the possibility of default. These include equities, commodities, high-yield bonds, and currencies, as well as any other financial instruments where the value is subject to market fluctuations. Investors hold risk assets to seek higher returns, but these investments come with the potential for losses, especially during periods of market instability.

Example

Stocks are considered risk assets because their value can fluctuate significantly based on market conditions, company performance, and economic factors.