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5 Components of Risk

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by

Carrie Burkhead

on 10 May 2010

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Transcript of 5 Components of Risk

5 Components of Risk 1. Inflation
2. Interest Rate
3. Business Failure
4. Financial
5. Global Investment Business Failure Risk Applies to common stock, preferred stock, and corporate bonds
Risk: Valuable products and services do not always guarantee positive response from customers.
Lower profits usually mean lower dividends
If the company declares bankruptcy your investment might be worthless Invest in more than one company Dividends: distributions of money, stock, or other property that a corporation pays to stockholders. Financial Market Risk Stocks, bonds, and mutual funds depend on the overall state of financial markets.
Markets are affected by social and political conditions. Global Investment Risk There is less of a risk for small investors to invest in global mutual funds instead of indiviual international stocks. 1. Evaluate international investments as if they were U.S. invetments
2. Consider the currency exchange rate Prezi by:
Shannon
Donahue
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