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Types of Financial Risk

Every saving and investment action involves different risks and returns. In general, financial theory classifies investment risks affecting asset values into two categories: systematic risk and unsystematic risk. In addition to the broad systematic and unsystematic risks, there are several specific types of risk.

4. In pairs/groups discuss and give define the following types of financial risk:

⃰ business risk   ⃰ credit or default risk   ⃰ country risk   ⃰ foreign-exchange risk

⃰ interest rate risk   ⃰ political risk   ⃰ counterparty risk.

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