Financial risks investing is what investors loses money in a company that has already in debt. Debt financing and run business is one process where income of the company goes to creditor before going to shareholders. To run a business there will be credit, profit, loss, etc. but flow of money handling and taking correct decision to fulfill the demand according to order or contract runs smooth flow of resources. The financial thread for the investor comes because of some common factors stated below.
Credit Risk: It is because of borrowed money and people who are not able to pay the money. It suffers like decreased income, loss of principle and interest and rise of cost.
Liquidity Risk: This type of risk is because the assets and shares that cannot able to sell fast enough to cut losses in bad time.
Foreign Investment Risk: Change in rules, taxes, exchange value, etc are big thread if a person handle some foreign investment.
Equity Risk: Change in price because of volatile prices in market and suddenly share price gone down and people cannot sell it in the market during his need.
Currency Risk: Investor holding foreign currency may be a big risk when interest rate, rules taxes, government monetary policies gets changed.
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Financial risks investing is the act of business. Is also the act of giving what you have to get what you want as in business scheme It is also a way of putting your financial life into risk, in order to attain a goal. And this goal is earning a perfect income. The financial included there is what you have,not until you have money that you can invest. You can invest even when you ha e a resources. The risk there is a game of loss or gain. The investment there is the main work done or act of work done, now investing a risk on a particular work without having a certainty about the investment is called financial risks investment
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