Financial risk: Difference between revisions
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1. | 1. ''Capital asset pricing model.'' | ||
In the Capital asset pricing model, financial risk means the component of total risk resulting from a firm’s capital structure. | |||
The more net debt there is in the capital structure, the greater the financial risk. | The more net debt there is in the capital structure, the greater the financial risk. | ||
2. | 2. ''Risk identification.'' | ||
The term is also used more generally to mean the wider risk of uncertain financial outcomes. | The term 'financial risk' is also used more generally to mean the wider risk of uncertain financial outcomes. | ||
For example the risks arising from not knowing the home currency value of a foreign currency receipt | For example, the risks arising from not knowing the future home currency value of a forecast foreign currency receipt, or the uncertainty regarding the size of future interest payments on floating rate borrowings. | ||
3. ''Adverse financial implications.'' | |||
'Financial risk' can also refer to the financial implications arising from all types of risk. | |||
Especially adverse financial implications. | |||
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* [[Business risk]] | * [[Business risk]] | ||
* [[Capital asset pricing model]] | * [[Capital asset pricing model]] | ||
* [[Deleverage]] | |||
* [[Equity risk]] | * [[Equity risk]] | ||
* [[Financial]] | |||
* [[Financial asset]] | |||
* [[Financial liability]] | |||
* [[Financial market price risk]] | * [[Financial market price risk]] | ||
* [[Financial market risk]] | |||
* [[Financial risk management]] | |||
* [[Guide to risk management]] | |||
* [[Leverage]] | |||
* [[Non-financial risk]] | |||
* [[Operational risk]] | * [[Operational risk]] | ||
* [[Reputational risk]] | |||
* [[Return]] | |||
* [[Risk]] | |||
* [[Risk taxonomy]] | * [[Risk taxonomy]] | ||
* [[Ungeared beta]] | * [[Ungeared beta]] | ||
==Other link== | |||
[http://www.treasurers.org/node/8443 Masterclass: Measuring financial risk, Will Spinney, The Treasurer | [http://www.treasurers.org/node/8443 Masterclass: Measuring financial risk, ''Will Spinney'', The Treasurer] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Latest revision as of 23:08, 11 March 2023
1. Capital asset pricing model.
In the Capital asset pricing model, financial risk means the component of total risk resulting from a firm’s capital structure.
The more net debt there is in the capital structure, the greater the financial risk.
2. Risk identification.
The term 'financial risk' is also used more generally to mean the wider risk of uncertain financial outcomes.
For example, the risks arising from not knowing the future home currency value of a forecast foreign currency receipt, or the uncertainty regarding the size of future interest payments on floating rate borrowings.
3. Adverse financial implications.
'Financial risk' can also refer to the financial implications arising from all types of risk.
Especially adverse financial implications.
See also
- Asset beta
- Business risk
- Capital asset pricing model
- Deleverage
- Equity risk
- Financial
- Financial asset
- Financial liability
- Financial market price risk
- Financial market risk
- Financial risk management
- Guide to risk management
- Leverage
- Non-financial risk
- Operational risk
- Reputational risk
- Return
- Risk
- Risk taxonomy
- Ungeared beta
Other link
Masterclass: Measuring financial risk, Will Spinney, The Treasurer
