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Investment risk

Investment risks are classified by types, sources of occurrence, forms and areas of manifestation.


  • Inflationary losses as a result of the loss of the real value of investments with the preservation or growth of the nominal value.

  • Deflationary - losses due to a decrease in the money supply in circulation.

  • Credit - losses as a result of default by the borrower.

  • Functional - financial losses due to mistakes in the formation and management of the investment portfolio.

  • Operational - losses as a result of personnel errors, equipment failures, emergency situations.

  • Market - A decrease in the value of assets as a result of fluctuations in stock prices, foreign exchange rates, commodity prices, and bank interest rates.

  • Liquidity risks - the inability to free up investments in a short period of time or a shortage of funds for payments to counterparties.

  • Selective - the wrong choice of an investment object.

  • Country - the probability of losses due to the unstable socio-economic situation in the country where the investment objects are located.

  • Risks of lost profits - losses as a result of non-performance of activities that could bring additional income.


Classification

  • Market (systematic, non-diversified) - the probability of losses arising for all objects and forms of investment.

  • Specific (unsystematic, diversified) - risks inherent in a particular investment instrument or direction.




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