Risk Averse describes an investor who has a low level of tolerance to possible loss of Principal through investing. This investor is willing to accept lower levels of expected return in order to avoid possible investment losses.
In the context of PATH analyses, "risk averse" corresponds to a management action that minimizes the risk of not meeting recovery and survival criteria, an action that succeeds in satisfying performance criteria over the widest range of assumptions.
An investor is said to be risk averse if, when presented with two investments with equal expected returns, the investor chooses the investment that is less risky. Risk averse is the opposite of risk loving.