This is the level of risk an investor is willing to have with an investment. All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds.
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Practically there is no business that is not risky, but you always have to take a risk which you are able to control. You can never avoid risk in business totally. That is why you have to be very careful and you must have a good knowledge of whatever business that you wants to go into.When you do investment, there is always risk of losing that amount you have invested..
Are there any other risks involved?
Investment risk rise,investor seek higher returns to compensate themselves for taking such risks. Thr risk of investments declining in value because of economic development or events that affect the entire market. Liquidity risk,concentration risk, credit risk, inflation risk,longevity risk.The risk involved in investments is very high and truth be told there is reward as well... but the higher the risk, the higher the return and the lower the risks the lower the return... so it means investment without risks might not being any return whatsoever.
You are right by alluding that returns are the rewards to investors for taking investment risks. The higher the risk involved in an investment, the higher the return as well. All these are illustrated in portfolio theory where you have to decide on how you want to spend your portfolio balance.Investment risk rise,investor seek higher returns to compensate themselves for taking such risks. Thr risk of investments declining in value because of economic development or events that affect the entire market. Liquidity risk,concentration risk, credit risk, inflation risk,longevity risk.
All investments carry some risk. In finance, risk refers to the uncertainty and / or potential financial loss involved in an investment decision. In general, as investment risks increase, investors make higher returns to compensate themselves for taking such risks.
The type and nature of the investment will largely determine the type of risk that it involves. The main risk is losing money. But that is not the only risk that it contains. F you go into a corrupt investment, you stand the risk of losing your reputation and integrity. These could even worth more than money at times.When you do investment, there is always risk of losing that amount you have invested..
Are there any other risks involved?
Yes dear, the level of risk of your investment is inversely proportional to your skills and experience.When you do investment, there is always risk of losing that amount you have invested..
Are there any other risks involved?