What are the different types of investment risks?

There are several types of investment risks that will generally fall into two categories. These categories are known as investment and investor. averse and nonaverse. systematic and nonsystematic. high return and low return. As they apply to knowing your customer and making recommendations which of the following are true statements?

What is reinvestment risk?

Reinvestment risk refers to the possibility that an investor will be unable to reinvest cash flows received from an investment, such as coupon payments or interest, at a rate comparable to their current rate of return. This new rate is called the reinvestment rate .

What is the difference between reinvestment risk and interest rate risk?

Reinvestment risk is the risk that the cash flows from an investment cannot be reinvested at the same rate of return as the original investment, while interest rate risk is the risk that changes in interest rates will affect the value of an investment.