Causes of risks, Financial Management

Assignment Help:

Q. Causes of Risks

1) Wrong decision of what to invest in.

2) Wrong timing of investments.

3) Nature of instruments invested such as shares or bonds, chit funds, benefit funds are highly risky than bank deposits or P.O. Certificates etc. .

4) Creditworthiness of Issuer: Securities of government and semi government bodies are more Creditworthy than those issued by the corporate sector.

5) Maturity Period or Length of Investment: Longer the period, the more risky is the investment Normally.

6) Amount of Vestment: Higher the amount invested in any security the larger is the risk.

7) Method of investment, namely, secured by collateral or not.

8) Terms of lending such as periodicity of servicing, redemption periods etc.

9) Nature of industry or business in which the company is operating.

10) National and international factors, acts of god, etc.


Related Discussions:- Causes of risks

Exchange Rate Parity Conditions, 1) According to the IFE (RIP), if U.S. inv...

1) According to the IFE (RIP), if U.S. investors expect a 3% rate of domestic inflation over one year, and a 6% rate of inflation in European countries that use the EUR, and requir

Illustrate the term structure of interest rates, Illustrate the term struct...

Illustrate the term structure of interest rates? The term structure of interest rates: The term to maturity affects the interest rate. Bonds along with identical risk may

Wacc based on the president''s preference, Sapp Trucking's balance sheet il...

Sapp Trucking's balance sheet illustrates a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%.  This debt presently has a

Share price movements, The management of Nelson plc wish to estimate their ...

The management of Nelson plc wish to estimate their firm's equity beta. Nelson has had a stock market quotation for only two months and the financial management feels that it would

Cash outflows and income statement of a company, a. You only need to compl...

a. You only need to complete the 2012 column, leave the 2011 column as is. b. Base you net income and certain other information needed from the income statement you completed in

Event study, Event studies are one of the most powerful and widely used app...

Event studies are one of the most powerful and widely used applications of the capital asset pricing model (CAPM). An event study is an attempt to determine whether a particular ev

present price of the common stock , Church Inc. is currently enjoying rela...

Church Inc. is currently enjoying relatively high growth because of a surge in the demand for its latest product.  Management expects earnings and dividends to grow at a rate of 25

What is the time value of money, What is the time value of money? The t...

What is the time value of money? The time value of money signifies that money you hold in your hand today is worth more than money you expect to receive in the future. Likewise

Criticize the flexible exchange rate regime, Criticism from the viewpoint o...

Criticism from the viewpoint of the proponents of the flexible exchange rate regime. Economic agents can hedge exchange risk through forward contracts and other methods. They do

Explain the financial desirability of burley plc, BURLEY PLC Financial...

BURLEY PLC Financial desirability In a real-terms analysis the real rate of return necessary by shareholders has to be used. This is found as follows 1 nominal rate/1 i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd