首页
外语
计算机
考研
公务员
职业资格
财经
工程
司法
医学
专升本
自考
实用职业技能
登录
外语
Types of risks So far we have used the term "risk" rather loosely. One type of risk is default risk, that is, the risk that
Types of risks So far we have used the term "risk" rather loosely. One type of risk is default risk, that is, the risk that
admin
2011-01-26
27
问题
Types of risks
So far we have used the term "risk" rather loosely. One type of risk is default risk, that is, the risk that the borrower will simply not repay the loan, due to either dishonesty or plain inability to do so. Another type of risk, called purchasing - power risk, is the risk that, due to an unexpectedly high inflation rate, the future interest payments, and the principal of the loan when finally repaid, will have less purchasing power than the lender anticipated at the time the loan was made. A similar risk is faced by borrowers. A borrower may cheerfully agree to pay, say, 15 percent interest, expecting that a 12 percent inflation rate will reduce the real value of the loan. But inflation may be only 4 percent.
A third type of risk is called "interest - rate risk" or "market risk", that is, the risk that the market value of a security will fall because interest rates will rise. We will discuss this further later; here we just present the intuitive idea. Suppose that five years ago you bought a ten-year 1 000 bond carrying a 6 percent interest rate, and tile interest rate now obtainable on similar bonds also have five years to go until they mature is 8 percent. Would anyone pay 1 000 for your bond? Surely not, because they could earn 80 per year by buying a new bond, and only 60 per year by buying your bond. Hence, to sell your bond you would have to reduce its price. But suppose the bond, instead of having five years to maturity, would mature in, say, ninety days, what would its price be then? It would still be less than 1 000 since the buyer would get 6 percent instead of 8 percent interest for ninety days; but since getting a lower interest sell for only ninety days does not involve much of a loss, the bond would sell for something close to 1 000. Hence, while holding any security with a fixed interest rate involves some interest - rate risk, the closer to maturity a security is, the lower is this risk. On the other hand, if interest rates fall you gain because your bond is worth more; and the longer the time until the bond matures, the greater is your gain. But the fact that you may gain as well as lose does not mean that you are taking no risk.
Diversification
All three types of risks are relevant for deciding what assets to include in a portfolio, and what debts to have outstanding. (The term portfolio means the collection of assets one owns.) Anyone holding more than one type of asset has to consider not the risk of each asset taken by itself, but the totality of the risk on various assets and debts jointly. Suppose someone holds stock in a company that is likely to gain from inflation. The riskiness of a portfolio that combines both of these stocks may be less than the riskiness of each stock taken separately. A port- folio consisting of assets that are affected in opposite directions by given future events is less risky than are the assets that compose it when taken individually. Hence a low-risk portfolio need not contain only assets that individually have little risk; sometimes one reduces the riskiness of a portfolio by adding some high - risk assets that offset the risks of other assets in it.
Choose the summary that best expresses the main idea of Paragraph 3.
选项
A、The risk factor in a portfolio can be reduced by including assets whose risks are complementary, i. e. , if one loses value because of particular circumstances the other gains because of those circumstances.
B、One should try to eliminate all risks from one’s portfolio by only buying very safe shares.
C、Under no circumstances should a careful investor add high risk assets to his/her portfolio even though the income or capital gain that may be received from that high risk asset could be very large.
答案
A
解析
转载请注明原文地址:https://kaotiyun.com/show/DAYd777K
0
初级(银行综合类)
原金融专业英语(FECT)
金融英语(FECT)
相关试题推荐
Canyousee______bottomoftheswimming-pool?
Georgeandhiswifehadasmallbar.Thebaroftenkeptopenuntilaftermidnight,becausepeoplecametodrinktherewhilethey
[A]between[B]atlast[C]pencil[D]office[D]plane[F]aunt[G]dictionaryintheend
Weight(体重)isoneofthetaboosubjects.InAmerica,itisOK,orevengood,tobethinbutitisanembarrassment(尴尬)tobeoverw
JacklosthisJoblastweek.Itwasdifficultforhimtofindanother【C1】______.【C2】______toldhimthatitwaspossibletogeta
A、Thesupermarketistoocrowded.B、Therearemanysupermarketshere.C、Look,justoverthere.C
InHongkong,moneysupplyisamarket-determinedphenomenonratherthanaMonetaryAuthorityregulatedone.
Explain:"EqualincreasesingovernmentspendingandtaxrevenuesofndollarswillincreasetheequilibriumGDPbyndollars".
Liquidityriskarisesfromtheinabilityofabanktoaccommodateunexpecteddecreasesin【21】ortofundincreasesin【22】.Whena
Rapidincreasesinthepricelevelduringperiodsofrecessionorhighunemploymentareknownas
随机试题
表单一般有两种用途:________和交互通信。
男性,38岁,出现会阴部持续性疼痛,伴发热,疼痛逐渐加重,并出现排尿困难、里急后重,直肠指诊因剧烈疼痛不满意,WBC16.0×109/L。最可能的诊断是
肱骨穿胸侧位,适用的病变是
李某长期吸毒,多次自费戒毒均未成功。某公安局在一次检查中发现后,将李某送至强制隔离戒毒所进行强制隔离戒毒。强制隔离戒毒属于()。
常用的物流服务项目质量计划编制方法有()
简述合同有效成立的条件。
个人贷款应当遵循()的原则。
属于账账核对的是()。
小组活动开始后,组员间有下面一段对话:成员甲:“其实一直以来,我们的婚姻生活都不太幸福……”成员乙:“你丈夫有了‘第三者’?”成员甲:“不是。”成员乙:“那是你的问题,你已不再爱他?”成员甲:“不是……”成员乙:“那……我猜……”在此情景中,社会工作者最适
设f(x)=dt+2,y=f(x)的反函数为y=g(x),则g’(2)=________
最新回复
(
0
)