COVER IN FINANCE RISKS: SAFEGUARDING INVESTMENTS

Financial risks are inherent in any investment and can lead to significant losses.

There are several types of financial risks, including market risk, credit risk, liquidity risk, and operational risk.

Market risk is the risk of losses due to changes in market conditions, such as interest rates, exchange rates, and stock prices.

Credit risk is the risk of losses due to the failure of a borrower to repay a loan or meet other financial obligations.

Liquidity risk is the risk of losses due to the inability to sell an investment quickly enough to meet financial obligations.

Operational risk is the risk of losses due to internal or external events, such as fraud, system failures, or natural disasters.

To mitigate financial risks, investors can use various strategies, such as diversification, hedging, and insurance.