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1) financial risk/ purchasing power risk/business risk/interest rate risk/market risk/liquidity risk

2) financial risk/ purchasing power risk/business risk/interest rate risk/market risk/liquidity risk

3) financial risk/ purchasing power risk/business risk/interest rate risk/market risk/liquidity risk

2. Types of investment risk Understanding the Risks and Rewards of Investing You've heard that investing can be risky, but what exactly are the risks? Why do some investments grow while others fail? The following examples demonstrate some of the potential pitfalls your investments might suffer. For each of the following, indicate which type of investment risk is being described. Primary Risk Investment CompWhiz is a tech company that initially sparked investor enthusiasm, resulting in a dramatic rise in share value after the initial public offering. In response to a rumor that the company's latest product contained a glitch, investors rushed to sell their shares, causing a sharp decline in the stock price. Wheat World is a company that distributes whole-grain cereals to major grocery stores across the country. A headline science news story points out that in the course of human evolution, only recently did humans begin to eat processed grains, and our bodies may not be well adapted to processing them. In some markets there are many buyers and sellers, such that it is relatively easy to cash in an investment at any given time. In thin markets, however, it may be difficult to find a buyer in a timely manner, forcing the seller to lower the price and lose money on the investment 2. Types of investment risk Understanding the Risks and Rewards of Investing You ve heard that investing can be risky, but what exactly are the risks? Why do some investments grow while others The following examples demonstrate some of the potential pitfalls your investments might suffer. For each of the following, indicate which type of investment risk is being described. Prima Investment Prior to 2009, the shoe company Runner's High had been growing at a steady pace expanding its product line and entering markets in new regions. When the recession hit however, inventories piled up as sales declined, such that the company was unable to make payments to some of its suppliers. GoOats! is a company that distributes granola bars to major grocery stores across the country. A headlinescience news story points out that in the course of human evolution, only recently did humans begin to eat processed grains, and our bodies may not be wel adapted to processing them. Real estate can be a valuable investment in times of price inflation, the higher the price level, the greater the value of the property. If the general price level declines, however these investments can lose significant value Save & Continue