Yahoo  Jul 30  Comment 
In 2001, it was ground zero for Argentina's financial earthquake. A neo-colonial architectural gem built long ago by the Bank of Boston, it became the focal point for angry mobs of protesters who stared ...
SeekingAlpha  Jul 30  Comment 
By Michelle Jones Alibaba's (Pending:BABA) initial public offering is expected to be one of the biggest ever. As a result, investors have been running a lot of different models in order to best estimate what the Chinese online retailer might be...
The Hindu Business Line  Jul 30  Comment 
E.I.D-Parry has mitigated the risks in sugar business by expanding outside Tamil Nadu to other Southern States with high sugar recoveries and clear policies on sugarcane pricing, said the company’...
Insurance Journal  Jul 30  Comment 
How are agencies targeting new business today? Will historical growth rates be sustainable? And just how much do agencies need to reinvest to achieve desired growth and enable perpetuation? These are some of the questions that a new industry...
SeekingAlpha  Jul 30  Comment 
By James Picerno: A funny thing happened on the way to higher interest rates: yields took a surprising turn lower. The 10-year Treasury yield yesterday dipped under 2.47%, near the lowest level since a swoon in late May pushed this benchmark rate...
SeekingAlpha  Jul 30  Comment 
By Joseph Y. Calhoun III: By Jeffrey P. Snider In light of second quarter GDP's imminent release and the explosion of commentary it will undoubtedly create, I thought it useful to promote a better context that includes all pertinent...
SeekingAlpha  Jul 30  Comment 
ByJosh Arnold: Deutsche Bank (NYSE:DB) has had a rough go of it for the past year or so. Shares have, after cresting $50 earlier in 2014, plummeted to the mid-$30s where we find them today. There have been a few factors that have led to declines...
Insurance Journal  Jul 30  Comment 
Jardine Lloyd Thompson Group Plc’s Dominic Burke said the worst slump in prices for insurance policies since Sept. 11, 2001 has led some insurers to take on too much risk to win business. Burke, the chief executive officer of the … The...


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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