Capital Risk

AAA

DEFINITION of 'Capital Risk'

1. The risk an investor faces that he or she may lose all or part of the principal amount invested.

2. The risk a company faces that it may lose value on its capital. The capital of a company can include equipment, factories and liquid securities.

INVESTOPEDIA EXPLAINS 'Capital Risk'

1. For example, when someone invests $10,000 into the stock market, he or she faces a capital risk on the $10,000 invested.

2. If a company does not insure the value of some of its assets, it will face capital risk from such things as fire, flood and theft.

RELATED TERMS
  1. Event Risk

    1. The risk due to unforeseen events partaken by or associated ...
  2. Capital

    1) Financial assets or the financial value of assets, such as ...
  3. Risk-Return Tradeoff

    The principle that potential return rises with an increase in ...
  4. Risk Management

    The process of identification, analysis and either acceptance ...
  5. Fixed Capital

    Assets or capital investments that are needed to start up and ...
  6. Lock In Profits

    Realizing the gains of a position, such as buying a stock, by ...
Related Articles
  1. Achieving Optimal Asset Allocation
    Investing Basics

    Achieving Optimal Asset Allocation

  2. The Advantages Of Bonds
    Investing

    The Advantages Of Bonds

  3. Corporate Bonds: An Introduction To ...
    Bonds & Fixed Income

    Corporate Bonds: An Introduction To ...

  4. Convertible Bonds: Pros And Cons For ...
    Bonds & Fixed Income

    Convertible Bonds: Pros And Cons For ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center