Financial Risk

Financial risk refers to a panoply of risks faced by individuals, companies and investors when making investments in corporate situations or in financial instruments. Financial risks, include the risk that an entity will default or fail to make payments in a timely fashion (credit and default risk) the risk that investors won\'t be able to get out of their investments quickly at a reasonable price (liquidity risk). Financial risk also entails exposure to interest-rate rates, currencies and macroeconomic events.