10 q chapter 4

is the degree of uncertainty associated with an investment’s earnings and the investment’s ability to pay the returns owed to investors.

• Market Risk

• Interest Rate Risk

• Business Risk

• Financial Risk

is the degree of uncertainty of payment resulting from a firm’s mix of debt and equity; the larger the proportion of debt financing, the greater this risk.

• Financial Risk

• . Purchasing Power Risk

• Liquidity Risk

• Business Risk

is the chance that changing price levels (inflation or deflation) will adversely affect investment returns.

• Purchasing Power Risk

• Interest Rate Risk

• Event Risk

• Market Risk

is the chance that changes in interest rates will adversely affect a security’s value

• Currency Exchange Risk

• Event Risk

• Interest Rate Risk

• Financial Risk

is the risk of not being able to liquidate an investment conveniently and at a reasonable price.

• variability

• Liquidity Risk

• Market Risk

• Business Risk

comes from an unexpected event that has a significant and unusually immediate effect on the underlying value of an investment

• Return

• variability

• Currency Exchange Risk

• Event Risk

is the risk of decline in investment returns because of market factors independent of the given investment.

• Market Risk

• Currency Exchange Risk

• Liquidity Risk

• Interest Rate Risk

is the risk caused by the varying exchange rates between the currencies of two countries.

• Currency Exchange Risk

• Event Risk

• Purchasing Power Risk

• variability

means the level of profit from an investment and the reward for investing

• Financial Risk

• Interest Rate Risk

• Return

• Event Risk

cash or near-cash that is received as a result of owning an investment;

• Return

• Income

• Capital gains (or losses):

• Total Return is