The Hindu Business Line  8 hrs ago  Comment 
Australia's weather bureau said on Tuesday the chance of an El Nino developing this year had risen to about 50 per cent after signs of renewed warming in tropical Pacific Ocean.The Bureau o...
New York Times  Mar 2  Comment 
Sleeping more than 8 hours may be an early sign of stroke risk, a new study shows.
MedPage Today  Mar 2  Comment 
(MedPage Today) -- Eating peanuts, as well as tree nuts, was associated with a reduced risk of cardiovascular disease.
Forbes  Mar 2  Comment 
A new study shows a significantly increased risk of stroke after chiropractic visits, especially in older people. Despite the actual findings in the study, the NIH press release and the study itself emphasized that there was only a small absolute...
The Economic Times  Mar 2  Comment 
Through the framework, an organization can reliably determine and predict the VAR threshold of their cyber exposure.
Automotive World  Mar 2  Comment 
Crash test dummies undergo collision after collision, and are designed to last for years. But their days might be numbered, as computer simulation develops to the point where it could prove more effective than the dummies themselves, writes Rachel...
Financial Times  Mar 1  Comment 
There exist perfectly rational reasons to op­pose membership both of the eurozone and the EU, writes Wolfgang Münchau
The Hindu Business Line  Mar 1  Comment 
Despite the recent price hikes, petrol and diesel are still cheaper by 20 per cent compared with last year, leaving more cash in the hands of many. Meera Siva sounded out three professionals on how this has changed the way they travel, spend and save


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.
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