Flight to Quality

Posted in Finance, Accounting and Economics Terms, Total Reads: 614

Definition: Flight to Quality

Flight to quality is a phenomenon marked by investors selling the more risky assets to invest in the less risky assets, like government securities.

The investors choose the less risky assets with lesser expected returns as they anticipate uncertainty in the markets or anticipate uncertainty with the riskier assets. As a result the demand for government securities and other less risky assets rises.



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