The Hindu Business Line  2 hrs ago  Comment 
Nearly ₹1.34-lakh crore worth of debt on operational and under-construction power projects is at risk, according to ratings agency Crisil. As per Crisil estimates, around 17,000 MW of operational p...
Clusterstock  Oct 22  Comment 
The least educated people in the professional world are also the least concerned about the risk of technology taking their jobs, according to a new survey released by salary benchmarking site Emolument. Emolument surveyed 900 people working...
Mondo Visione  Oct 21  Comment 
Please refer to MIAX Regulatory Circular 2016-50 for details on changes to Rule 519A(a) for Risk Protection Monitor (RPM) settings and new Rule 519A(b) describing mandatory Member participation for establishing Allowable Order Rate settings and ...
Forbes  Oct 21  Comment 
Throughout years of producing hundreds of club shows and a number of music festivals in Texas, ScoreMore Shows is gearing up to produce their first-annual Mala Luna Music Festival in San Antonio, Tex. The festival is the first hip-hop and...
MarketWatch  Oct 21  Comment 
Ohio is in danger this year of losing its streak of picking the last 13 presidential winners.
Forbes  Oct 21  Comment 
A little known four-person firm caller LMRKTS in New York just eliminated $430 billion in overlapping foreign exchange trades in 25 minutes.
MedPage Today  Oct 21  Comment 
(MedPage Today) -- Health news and commentary from around the Web, gathered by the MedPage Today staff
guardian.co.uk  Oct 21  Comment 
Free flow of skilled labour is vital for maintaining competitive edge in research and innovation – and potential for growth Intellectual capital has not featured prominently in the UK’s Brexit debate. Media outlets and commentators have...
newratings.com  Oct 21  Comment 
CANBERA (dpa-AFX) - The New Zealand dollar weakened against the other major currencies in the Asian session on Friday on risk aversion, as the fall in crude oil prices dampened investor sentiment. Crude of December delivery is currently down...


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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