Finally, Congress ordered that the companies be required to keep more capital as a cushion against losses if they invested in riskier securities.

But they typically have the option of moving into less risky securities or even to the sidelines.

They showed us a list saying that there were no risky securities in the investment pool.

Back then, fund managers got into trouble by buying illiquid or highly risky securities.

The California county contends that the firm sold it risky and unsuitable securities.

More frequent disclosure might also discourage some funds from investing in risky securities altogether.

They traded risky securities for safer ones, while trying to make an accurate accounting of all the money in the fund.

"People cannot meet that target without investing in risky securities."

As such, dealers are generally more comfortable buying the riskier securities than other investors might be.

Therefore investors expect a premium, or risk premium for investing in the risky security.