Investment Planning Flashcards
1
Q
What is systematic risk?
A
Also known as market risk, likely to affect all investments simultaneously. Unpredictable & impossible to diversify away.
2
Q
What types of risks are unsystematic risk?
A
- Business risk (e.g. A strike or labour issue)
- Management risk (e.g. Succession planning, calibre of board sufficient?)
- Financial risk (e.g. How is the company structured? Reliant on borrowing?)
- Industry risk (e.g. Is the company vulnerable to imposition of tariffs or change in tax regime?)
- Investment risk
3
Q
What types of investment risk are there?
A
- Liquidity risk
- Inflation risk
- Interest rate risk
- Gearing risk
- Currency risk
- Credit risk
- Bail-in risk
- Event risk
- Political risk
- Volatility risk
