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100 FAQ's on Basic Finance

Module Units

What are the various types of the risks once I start trading?

There are various types of risks involved when a person buys or sells a stock. Some of these include:

  • Systematic risk- This risk is associated with the regular price fluctuations in the market. 
  • Unsystematic risk – Such risks affect a particular company or industry.
  • Business risk – This type of risk arises if a certain business is not doing well because of its performance.
  • Inflationary Risk- With an increase in inflation, the cost of raw material will increase, which can influence the prices of shares. 
  • Interest risk – Changes in the rate of interest by the RBI can be a risk for investors

Each type of security comes with some inherent risks, because of its features and the factors affecting its trade.As an informed investor, one should study the types of risks they can be exposed to, before they decide to make an investment in any security.

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Units 62/101