Investment Risk
Investment Risk

See Also:
Hedging Risk
Risk Premium
Business Risk
Interest Rate Risk
Commercial Risk

Investment Risk Definition

The investment risk definition is the risk of a particular investment. Furthermore, an investment risk assessment usually contains several different forms ranging from interest rate risks to currency risks.

Investment Risk Meaning

Investment risk contains several different measures, including the following:

Market Risk

This is the risk associated within a market or index like the S&P 500 or the Dow Jones. There are currently two types of market risk. The first is the unsystematic risk. It can be diversified away in a well-managed portfolio. Then the other is systematic risk. Use it to describe factors that deal with the entire economy or an index which are simply inherent when investing.

Interest Rate Risk

This is the risk associated with bond and debt markets. Specifically the ways in which the interest rates change in the market or what is better known as the yield to maturity.

Currency Risk

Currency is the risk associated with an investment if it is denominated in another currency. The risk here is that the exchange rates change. In some cases it may benefit the investor, but in others, it can really hurt.

Liquidity Risk

This is the risk associated with the ease an investor can convert that particular investment into cash. For example, land is a lot harder to turn into cash over a very liquid asset, such as commercial paper. This is not normally a problem unless an investor needs to meet short term obligations.

Financial Risk

This is the risk that there is something fundamentally wrong in the financials of a company. The investor may not see that risk. Furthermore, this type of risk is normally associated with scandals such as Enron or Worldcom.
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Investment risk
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Investment risk


Financial Ratios

See also: Quick Ratio Analysis Price to Book Value Analysis Price Earnings Growth Ratio Analysis Time Interest Earned Ratio Analysis Use of Financial Ratios Financial Ratios are used to measure financial performance against standards. Analysts compare financial ratios to industry averages (benchmarking), industry standards or rules of thumbs and against internal trends (trends analysis). The

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Margin vs Markup

See Also: Gross Profit Margin Analysis Retail Markup Chart of Accounts (COA) Margin Percentage Calculation Markup Percentage Calculation Margin vs Markup Differences Is there a difference between margin vs markup? Absolutely. More and more in today’s environment, these two terms are being used interchangeably to mean gross margin, but that misunderstanding may be the menace

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Markup Percentage Calculation

See Also: Margin vs Markup Margin Percentage Calculation Retail Markup Gross Profit Margin Ratio Analysis Operating Profit Margin Ratio Analysis Markup Percentage Definition Define the markup percentage as the increase on the cost price. The markup sales are expressed as a percentage increase as to try and ensure that a company can receive the proper

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