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Type of financial risk - Coggle Diagram
Type of financial risk
Market risk
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Relative Risk
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a relative-risk from a foreign exchange fluctuation may be higher if the maximum sales accounted by an organization are of export sales.
Directional Risk
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For example an investor holding some shares experience a loss when the market price of those shares falls down.
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Volatility Risk
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For example it applies to the portfolios of derivative instruments, where the volatility of its underlying is a major influence of prices.
Credit Risk
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settlement risk
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reexamination of settlement risk : Revocable, Irrevocable, Uncertain, Settled, Failed
Liquidity Risk
Asset Risk
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a position cannot easily be wounded or offset at short notice without significantly influencing the price market, because of inadequate market depth or market disruption.
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Funding risk
current or prospective risk arising from an instituition's inability to meet its liabilities and obligations as they come due without incurring unacceptable losses
Operational Risk
Defined as the risk of loss resulting from inadequate or failed internal processes , people and systems or from external events.
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Fraud Risk
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Internal & External : misappropriate property, or involving at least one internal party doing unauthorized activity and internal theft and fraud.
People Risk
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for example employee collision, lack of knowledge, lack of key personnel.
Legal Risk
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Furthermore, this relates to the regulatory-risk, where a transaction could conflict with a government policy or particular legislation (law) might be amended in the future with retrospective effect.