The Economic Times  2 hrs ago  Comment 
The South Korean won edged higher on Thursday as gains in Asian equities helped soothe sentiment and lent support to regional currencies.
guardian.co.uk  5 hrs ago  Comment 
Many investors are unaware of their exposure to companies with concessions overlapping world heritage sites. It’s time they opened their eyes – and lobbied Shell has seen sense. Or at least, that’s what green NGOs like us want to believe....
SeekingAlpha  Sep 30  Comment 
GenEng News  Sep 30  Comment 
Today Color Genomics unveiled the Benefits Program for Genetic Testing for Breast and Ovarian Cancer Risk, a first-of-its-kind initiative to offer this type of testing to an organization’s employee base. The initial partners include 18...
Financial Times  Sep 30  Comment 
Lower prices for second-hand cars due to emissions crisis could be problem
Insurance Journal  Sep 30  Comment 
A new study looking back over 1,000 years finds the flooding risk along the New York and New Jersey coasts increased greatly after industrialization, and major storms that once might have occurred every 500 years could soon happen every 25 …
Wall Street Journal  Sep 30  Comment 
The European Commission’s plan for a single capital market starts with products designed to fit regulations, not economics.


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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