Investment Risks

Question 1

Capital Risk

Answer 1

the risk of loss of the principal value of an asset or security

Question 2

Interest rate risk

Answer 2

is a loss of market value on fixed income securities because of a rise in interest rates

Question 3

liquidity risk

Answer 3

is the risk that an investor will not be able to sell or liquidate a security at the fair market value.

Question 4

Credit risk

Answer 4

is the risk that a company will declare bankruptcy or financial obligations won’t be met

Question 5

Economic and social risk

Answer 5

refers to how domestic and world affairs affect investments