In this video, I will explain the various financial risks such as interest rate risks, credit risk, market risk and liquidity risks.
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Financial risk refers to the possibility of losing money on an investment or business venture. There are several types of financial risks that can affect individuals, companies, and governments. Below are some key examples:

Credit Risk (Default Risk):

The risk that a borrower will default on a loan by failing to make the required payments.
Example: A bank faces credit risk when it lends money to borrowers who may not repay their loans.
Market Risk:

The risk of losses due to factors that affect the overall performance of the financial markets.
Example: An investor holds a portfolio of stocks, and the market experiences a downturn, leading to a decline in stock prices.
Liquidity Risk:

The risk of being unable to convert assets into cash quickly or facing difficulty in selling assets without a significant drop in value.
Example: A real estate firm cannot sell its properties quickly enough to meet its short-term debt obligations.
Interest Rate Risk:

The risk that an investment's value will change due to a change in the absolute level of interest rates.
Example: A company issues fixed-rate bonds, and then interest rates rise, causing the market value of those bonds to decline.
Currency Risk (Foreign Exchange Risk):

The risk of a financial loss resulting from changes in the exchange rate.
Example: A U.S. company has significant sales in Europe, and the euro weakens against the dollar, reducing the company's revenues when converted back to dollars.
Operational Risk:

The risk arising from execution of a company's business functions, including technical failures, management errors, or fraud.
Example: A software glitch in a bank’s trading system causes unauthorized transactions that result in financial losses.
Inflation Risk (Purchasing Power Risk):

The risk that the value of assets or income will be eroded as inflation shrinks the purchasing power of a currency.
Example: An investor holds a long-term bond with a fixed interest rate that does not keep up with the rate of inflation, leading to a decrease in real returns.
Legal Risk:

The risk of financial loss due to legal proceedings or changes in regulations.
Example: A pharmaceutical company faces legal risk if it is sued for side effects caused by its drugs.
Reputation Risk:

The risk of losing money due to damage to an organization's reputation or standing.
Example: A food manufacturer faces a scandal due to a failed health inspection, resulting in customer boycotts and decreased sales.
Country Risk:

The risk of loss due to political instability or changes in a country's economic policies.
Example: An investor buys bonds issued by a foreign government, and that government later defaults on its debt due to political upheaval.
Systemic Risk:

The risk of collapse of an entire financial system or entire market, due to the interconnectedness of financial institutions and markets.
Example: The 2008 financial crisis demonstrated systemic risk when the fall of major financial institutions led to a global financial downturn.