Investment Dictionaryrisk-Free Interest Rate A risk-free interest rate is rate of interests that would be paid by fixed income securities that contains no risk at all. For a very long time short-term US Treasury securities was used to d http://www.investingforbeginners.eu/riskfree_interest_rate Real risk-Free Interest Rate A real risk-free interest rate is very similar to (nominal) risk free rate. The only difference is that real risk free rate is under condition if no inflation expected. Real risk free rate is deducted from nomina http://www.investingforbeginners.eu/real_riskfree_interest_rate Diversifiable risk A diversifiable risk is the risk that can be reduced by increasing number of investments in the investment portfolio. For example, company’s risk can easy diversifiable by choosing more companies. Even coun http://www.investingforbeginners.eu/diversifiable_risk Market risk A market risk is a systematical risk that cannot be diversified. There are some risk factors that can make effect on the whole market: economical cycles, nature disasters, wars; and such are not diversifiable ris http://www.investingforbeginners.eu/market_risk Political risk A political risk is related to political decisions and political environment development, and is one of the main risks when investing in emerging markets. Developed markets also contain political risk, but there http://www.investingforbeginners.eu/political_risk risk Tolerance Risk tolerance is a characteristic that describes the investor and his ability to withstand losses from investments. The higher risk tolerance of investor the more losses he/she may handle. Investm http://www.investingforbeginners.eu/risk_tolerance risk Averse Risk averse is a characteristic of an investor who is avoiding risk. The more investor is avoiding the risk the more is he risk averse. Almost all the investors (as people are too) are more or less risk averse an http://www.investingforbeginners.eu/risk_averse Market risk Premium (Equity Risk Premium) Every investment carries some level of risk and some level of potential return. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq http://www.investingforbeginners.eu/market_risk_premium |   Recommended Topics Investment psychology gains momentum in contemporary business world Balance Sheet Most Popular Articles Investing in Gold (I) Investing in Gold (II) Investing in Uncertain Period
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