INVESMENT RISKS FATIN ABD ALKREEM

What is the investment risks ? Probability failure achieving the expected revenue from the investment Measure SD.

Types of investment risks : 1- Systematic risks . 2- Non systematic risks.

1- Systematic risks : it’s affect on all the economic activities in particular country, And it’s affect specially on financial papers in all the organizations. EX / inflation / deflation / the economic , social , political conditions.

2-Non Systematic risks it’s affect on the activities of particular company. EX /management mistakes , new inventions , change the consumer taste. Treatment // by variety financial papers investment portfolio

Resources of investment risks : 1-resources of systematic risks : A- risks of prices or interest rate. B- risks of purchasing power for cash unit. C- markets risks. 2-resources of non systematic risks: A-management risks. B-industry risks.

A-risks of prices or interest rates: It’s about how can the change of interest rates affect on the prices of financial papers in the markets. The bonds and the interest rates have negative relationship (inverse relationship). The interest rates can affect in the financial papers that have fixed income (bonds / excellent stocks). And it’s affect less in the financial papers that have changeable income (usual stocks). Treatment // by buying short-term bonds.

B- risks of purchasing power for cash unit: It’s the uncertainty situation that surrounding the future of the purchasing power of the invested amount. And this type have very big risk in the investment of (saving / insurance / bonds) fixed interest rate.

The relationship between : EX / inflation purchasing power

The must affected investment tools in this risks are long-term financial papers long-term bonds Usual stocks protect the investors from purchasing power of cash unit

C- markets risks: It’s happened because unexpected events and make the campaign of usual stocks for this type of risks more affected from the other investors.

2-resources of nonsystematic risks: A-management risks: It’s possibly the management mistakes in particularly co. make difference in the revenue rate from the revenue that has been expected from the investment. EX / 1-don’t take the right decisions in the emergency accident 2- low the management’s ability to manage the crises. Treatment// by doing evaluation for every individual getting into the administrative process.

Thank you for attention Are there any question ?