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Investment risk is determined by the investor. You need to ask the investor what risk they are prepared to take. If they wish to take no risk and want to guarantee their investment then there investment risk has been determined. Therefore it is likely their money will be invested in a building society account which mirrors their attitude to risk. If an investor is more speculative then they may wish to invest in stocks and shares, which has risk and reward depending on performance. So investment risk is determined by the investors attitude to risk.
What else can I help you with?
What factors should be considered when buying assets for investment purposes?
When buying assets for investment purposes, consider factors such as the potential return on investment, the level of risk involved, the liquidity of the asset, the market conditions, the investment timeframe, and your own financial goals and risk tolerance.
what is Investment Profile?
An investment profile is a collection of critical information about financial assets or investments. When constructing an investment profile, the investor's risk tolerance, risk capacity, investment time periods, revenues, liquidity requirements, tax questions, goals, and expectations should all be considered.
Is real estate considered a high-risk investment?
Real estate can be considered a high-risk investment due to factors like market fluctuations, economic conditions, and potential for unexpected expenses. Investors should carefully assess risks before investing in real estate.
Why do lenders put their money into government bonds?
Because these bonds are considered a very low risk dependable investment.
What is the safest investment option for seniors?
For seniors, the safest investment option is typically considered to be government bonds or certificates of deposit (CDs) from reputable banks. These investments offer a guaranteed return and are generally considered low-risk.
Why is a bond with a higher interest rate often considered a higher risk investment?
Bonds with a higher interest rate are often considered a higher risk investment because when interest rates rise, bond prices fall; conversely, when rates decline, bond prices rise. The longer the time to a bond's maturity, the greater its interest rate risk.
What are the factors that investor keep in consideration while preferring investment in stock over savings?
The higher risk involved in investing in stock. He should also keep in mind the time horizon of investment, as investment in stocks is considered as long term investment.
Why is an investment grade bond considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
Why is an investment grade bond is considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
How are volatility and risk related in an investment?
The risk of an investment can be measured by observing how volatile the return of that investment has historically been over a period of time.
Why people invest where their is more risk?
Return on investment is directly related to risk of investment--the riskier an investment is, the more you have to pay people for making it.
How are volatility and risk related in investment?
The risk of an investment can be measured by observing how volatile the return of that investment has historically been over a period of time.
