SOURCE ROOM
What is Risk?
U.S. Securities and Exchange Commission, Investor.gov
Claims Supported by This Source
- In finance, risk refers to the degree of uncertainty and potential for loss associated with an investment decision. The higher the risk, the higher the return investors demand to compensate for it.
- The types of risk listed are business risk, market risk, inflation risk, interest rate risk, and liquidity risk.
- On average, large-cap stocks as a whole experience a loss in approximately one out of every three years.
- The FDIC insures deposits up to $250,000 per depositor, per bank. The FDIC only insures deposits; it does not insure securities or mutual funds.
- SIPC covers securities in an account for up to $500,000, including $250,000 in cash, if a brokerage firm fails, but does not cover losses from a decline in value.
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