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

Define that an option is in-, What is meant by the terms that an option is ...

What is meant by the terms that an option is in-, at-, or out-of-the-money? Answer:  A call or put option with S t > E (E > S t ) is considered to as trading in-the-money.  If

Basic methods of risk management, Q. Basic Methods of Risk Management? ...

Q. Basic Methods of Risk Management? Risk is inherent in business and hence there is no escape from the risk for a businessman. However, he may face this problem with greater c

Explain about the corporate reorganisations, Corporate Reorganisations ...

Corporate Reorganisations This topic deals principally with mergers and takeovers. It's very highly examinable. The discussion areas overlap with business strategy paper so don

What do you mean by account, Q. What do you mean by Account? Account - ...

Q. What do you mean by Account? Account - Formal record which represents, in words, money or other unit of measurement, certainresources, transactions, claims to such resources

Explain the operating profit margin - performance ratios, Operating profit ...

Operating profit margin Operating profit margin    =   (PBIT / Turnover) x 100% This is the ratio of operating profit to turnover or sales. A high operating profit margin is

Security offered - influence the rate of interest, Q. Security offered -  ...

Q. Security offered -  influence the rate of interest ? The rate of interest charged on the loan will be lesser if the debt is secured against an asset or assets of the company

Explain should a firm hedge and why or why not, Should a firm hedge?  Why o...

Should a firm hedge?  Why or why not? Answer:  Firms may not need to hedge exchange risk in a perfect capital market. But firms can add to their value by hedging if markets are

Finance charges on credit card, Jack needs to borrow $1,000 for the next ye...

Jack needs to borrow $1,000 for the next year. Bank South will give him the loan at 9 percent. Suncoast bank will give him the loan at 7 percent with a $50 loan origination fee. Fi

Beta, Beta Beta is a measure of the market risk, or methodical risk, o...

Beta Beta is a measure of the market risk, or methodical risk, of a particular privacy or portfolio. Systematic risk defines any risk that influences the value of a huge numbe

Provisions for paying off bonds, The issuer of the bond has to repay ...

The issuer of the bond has to repay the bondholders the principal by the stated maturity date. This can be repaid by the issuer in one lumpsum payment at the matu

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