Risk in the financial market
Article about what types of risks can arise in the financial market.
The risk in the financial market is understood as probability of emergence of negative conditions which conduct to reduction of the expected income or to capital loss.
The risk is inherent in any form of activity. It speaks a set of existing factors and conditions which influence for the outcome of decisions accepted by you. Activity in the financial market is also interfaced to a set of risks. There are following types of risks in the financial market:
1. The risk connected with decrease in financial stability which arises because of imperfection of structure of the capital, that is because of a big stream of a share of debt funds. This type of risk is extremely dangerous and can result in bankruptcy of the enterprise.
2. If your enterprise is engaged in investment activity, there can be an investment risk which also can lead to capital loss. As the reason of emergence of this type of risk decrease in appeal of the investment project can serve.
3. The percentage risk arises owing to change of an interest rate in the market of finance. It is important to businessman to consider state regulation, change of the offer of free money as the percentage risk influences dividend policy, issue and other financial operations.
4. Currency risk. The enterprises which conduct foreign economic activity face it. So, if the enterprise is engaged in import, and the exchange rate of foreign currency is higher in relation to national currency, there is a threat of loss of the expected income. Fall of a rate of this exchange rate conducts to a loss in case the enterprise is engaged in export activity.
5. Credit risk. Many enterprises give out the commodity, commercial, consumer credits to clients. And because of untimely return, insolvency of consumers there can be a credit risk in the financial market. There is a probability of additional expenses that negatively influences enterprise development.
6. The commercial risk can arise in the course of realization of services, the goods. It is connected with transportation of the goods, with their acceptance or force-majeur circumstances.
In modern conditions the businessman can face any of above-mentioned types of risk. The main thing to remember that the risk in the financial market is higher, the and higher to receive probability the maximum expected income.
And to reduce risks at registration of SP it is best of all to address to professionals, for example to the Monopolist company