Risk

RECENT NEWS
The Economic Times  3 hrs ago  Comment 
Supreme Court's ruling could hurt prospects for economic recovery and deepen fears among foreign investors about uncertainty of policies in India.
newratings.com  4 hrs ago  Comment 
BRUSSELS (dpa-AFX) - The Japanese yen strengthened against its key counterparts in the Asian session on Tuesday as traders sought to move into haven assets before the presidents of Russia and Ukraine meet today. Amid escalating geopolitical...
SeekingAlpha  Aug 25  Comment 
By Dallas Salazar: I first heard about C1 Financial (NYSE:BNK) in early 2012 when the bank, which had just changed its name and was looking to make a splash regionally, ran a promotion where it gave any personal depositor willing to invest $1...
Forbes  Aug 25  Comment 
A significant phishing attack took place last week. Why are people still falling prey to such a simple scam? And why are you at risk?
Forex News  Aug 25  Comment 
The Malaysian ringgit fell today as risk aversion eroded the appeal of higher-yielding currencies associated with risk. The market sentiment was hurt by prospects of early monetary tightening from the Federal Reserve.(...)Read the rest of...
Cloud Computing  Aug 25  Comment 
PORTLAND, Ore. , Aug. 25, 2014 /PRNewswire/ -- Clinicient Inc., a leader in outpatient rehabilitation business solutions, today announced the results of their Medicare compliance risk survey of therapy practice owners and managers. 441 physical...
New York Times  Aug 25  Comment 
As advertisers become more interested in big events that viewers watch in real time, the Primetime Emmy Awards garner more attention with a social media and digital media push.
MarketWatch  Aug 23  Comment 
Fed's Bullard: Europe is biggest risk to outlook
Clusterstock  Aug 22  Comment 
We're sending one lucky winner and a friend to Silicon Valley for an insider's look at the upper echelons of the tech world. Meet CEOs and execs from  Pinterest ,  LinkedIn ,  Twitter ,  Chegg , and YCombinator , tour their campuses, and...
Wall Street Journal  Aug 22  Comment 
Royal Bank of Canada's strategy to control risk is under renewed scrutiny amid the success of its investment bank, which posted record results in the most recent quarter.




 

Risk in economic terms indicates the probability of the occurance of a specific event, which would lead to damage or loss (p.e. the likelihood of losing ship and freight to a hurricane). In distinction to risk, chance indicates the possibility of a positive outcome.

Investments include both risk and chance. This is the so called Risk-Return Tradeoff: low levels of uncertainty offer low potential returns but also low potential losses, whereas high levels of uncertainty offer high potential returns but also high potential losses. Another way many investors quantify and calculate risk is in terms of the standard deviation of returns. This is because all else being equal, risk averse investors prefer returns that are less volatile and more predictable.

Companies try to identify, analyse and control risk through concepts of risk management.

Risks of Bond Investing

Bonds carry credit risk ("will I get my money back?"), prepayment risk, liquidity risk and interest-rate risk.

  • Many bonds give the bond issuer the right to repay the bond early -- which happens more often when rates are low, in other words, just when you don't want your money back. This is prepayment risk.
  • Liquidity risk is the risk that you won't find a good price for your bond when you want to sell it -- because there are so many more bond issuers than stock issuers, and because bonds are not exchange-traded, there may not be a willing buyer.
  • Interest-rate risk is the opposite of prepayment risk: when rates go up, the value of your bond will drop (it drops more, the further away it is from maturity). If your circumstances change and you need to sell the bond before maturity, you can lose capital that you would otherwise receive, if you held the bond to maturity.
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki