Sources of risk to an investor include
1. loss when funds are reinvested at lower rates
2. fluctuations in securities markets
3. the financing decisions of the firm
A)1 and 2
B)1 and 3
C)2 and 3
D)all of the above

Question

Quizplus · Accepted Answer

All listed options are sources of risk to an investor. Loss when funds are reinvested at lower rates represents reinvestment risk. Fluctuations in securities markets introduce market risk. The financing decisions of the firm can affect its value and the value of its securities, introducing financial risk.

Sources of Risk to an Investor Include