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

Downgrade risk, Market participants' measure the default risk of an i...

Market participants' measure the default risk of an issue on the basis of the credit ratings that the credit rating agencies assign to the issues. Once rating is

Financial analysis, are footnotes important in analysing ratios

are footnotes important in analysing ratios

Operating cycle, Define operating cycle and long and short operating cycle?...

Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??

Calculate the investment in a project, BAGS, Inc. is considering an investm...

BAGS, Inc. is considering an investment in a new project. The required investment is $1,000,000. After-tax net cash flows are expected to be $50,000 the first year and are expected

Expalin depository institutions, Depository institutions Depository ins...

Depository institutions Depository institutions: intermediaries with a important proportion of their funds derived from customer deposits - include commercial banks - savings i

Explain the difference between cash and profit, Explain the Difference betw...

Explain the Difference between cash and profit Cash flow statement shows all the cash in and cash out for the organisation for that period. It demonstrates the cash generating

Define compensating balances, What are compensating balances and why do ban...

What are compensating balances and why do banks require them from some customers?  Under what circumstances would banks be most likely to impose compensating balances? Compensati

Describe the meaning of net income plus depreciation, The so-called "cash f...

The so-called "cash flow" (net income plus depreciation) is a flow of cash, but is it a flow to the shareholders or to the company? Suppose that net income plus depreciation is

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