What is '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.
BREAKING DOWN '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.