Mastergp
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They are many types of investment risk but I will mention a few thy include :
Business risk :
The inability of the investor to predict the outcome of business nature with it attendant variations in the rate of return give rise to this type of risk. This implies that the reward or profit expected from the business venture canoe be predicted. The business may turn out to be unproductive owning to changes in the economic conditions of the environment where the business is situated.
Financial risk:
The capital structure of a firm and it source of financing give rise to this type of risk. Put more differently, this emanate from equity or debt financing of business. When one borrows at a high rate of interest and are unable to pay, the organization may run the risk of losing the investment because lenders may sell off the the factory to recover their debts if it is used as a collateral.
Liquidity risk: it is the type of risk that result from the inability to sell in the investment to recover cash needed to met the day to the running of other business.
Business risk :
The inability of the investor to predict the outcome of business nature with it attendant variations in the rate of return give rise to this type of risk. This implies that the reward or profit expected from the business venture canoe be predicted. The business may turn out to be unproductive owning to changes in the economic conditions of the environment where the business is situated.
Financial risk:
The capital structure of a firm and it source of financing give rise to this type of risk. Put more differently, this emanate from equity or debt financing of business. When one borrows at a high rate of interest and are unable to pay, the organization may run the risk of losing the investment because lenders may sell off the the factory to recover their debts if it is used as a collateral.
Liquidity risk: it is the type of risk that result from the inability to sell in the investment to recover cash needed to met the day to the running of other business.
