Economic risk definition
Economic risk. The Subscriber has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of the Subscriber’s investment in and to any of the Securities, and the Subscriber is able to bear the economic risk of a total loss of the Subscriber’s investment in and to any of the Securities. The Subscriber understands that an investment in any of the Securities is a speculative investment and that there is no guarantee of success of the Company’s management’s plans. Management’s plans are an effort to apply present knowledge and experience to project a future course of action which is hoped will result in financial success employing the Company’s assets and with the present level of management’s skills and of those whom the Company will need to attract (which cannot be assured). Additionally, all plans are capable of being frustrated by new or unrecognized or unappreciated present or future circumstances which can typically not be accurately, or at all, predicted;
Economic risk the Subscriber has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of the Subscriber's investment in and to any of the Shares, and the Subscriber is able to bear the economic risk of a total loss of the Subscriber's investment in and to any of the Shares;
Economic risk. The development of an economy typically takes place in wave movements, the phases of which can be divided into upswing, peak phase, downturn and low phase. This economic cycle and the interventions often associated with it by governments and central banks can last for several years or decades and have a significant impact on the performance of various asset classes. Economically unfavorable phases can thus affect a capital investment in the long term. Inflation risk: Inflation risk describes the risk of suffering financial loss as a result of devaluation. If inflation, i.e. the increase in the price of goods and services, exceeds the nominal interest rate on an investment, this results in a loss of purchasing power in the amount of the difference. In this case, one speaks of negative real interest rates. Country risk: A foreign state can influence the movement of capital and the transferability of its currency. If, for this reason, a debtor resident in such a state is unable to fulfil an obligation (on time) despite its own solvency, this is referred to as a country or transfer risk. An investor can suffer a financial loss as a result. Price risk: Prices are subject to fluctuations and can fluctuate greatly depending on the conditions on the market. This offers the possibility of profits, but also a very high risk of losses. What was worth a lot today can be worthless tomorrow. Be aware of this when you invest. Currency risk: In the case of investments in a foreign currency, the return generated does not depend solely on the nominal return. It is also influenced by the development of the exchange rate of the foreign currency to the home currency. Financial loss can occur if the foreign currency in which the investment was made depreciates against the home currency. Liquidity risk: Investments that can usually be bought and sold in the short term and whose buying and selling prices are close to each other are called liquid ones. For these investments, there is usually a sufficient number of buyers and sellers to ensure continuous and smooth trading. In the case of illiquid investments or even in market phases in which there is insufficient liquidity, however, there is no guarantee that a sale of an investment is possible in the short term and at low price reductions. This can lead to asset losses if, for example, an investment can only be sold with price losses. Cost risk: Costs are often neglected as a risk factor of investment. However, open and hidden co...
Examples of Economic risk in a sentence
Economic risk - the risk of unfavorable events of economic nature, concerning the Client.
Economic risk of loss shall be determined under the rules of Regulations Section 1.752-2.
Economic risk divides into price risk, supply/demand risk and exchange risk (Park & Matunhire, 2011).