What is the realization of risk?
realization of risk is the possibility that investors can’t make Investments open to shipping in the capital markets in normal price, investors need to be able to recover and transfer of existing investments at any time, if they can not find willing buyers at reasonable prices in the short term, investors will lose other new investment opportunities or facing the loss of the sale price reduction.
realization of risk depends on the performance of capital goods projectsin the market, realization of risk is greater in the projects can not be traded in the capital market,the liquidity risk of long-term projects is greater than short-term projects, the liquidity risk are strong in the more frequent transaction items , especially portfolio, Investors expect return on investment in power includes cash rate to compensate for the realization of additional risk.
Bonds issued from our current situation, although the bonds are more frequent ,the stock of the inter-bank bond is also growing, but bond liquidity risk of the bond secondary market has not decreased, bonds is unlikely to realizable at a reasonable price, Therefore, the rural credit cooperatives as small and medium financial institutions must not blindly pursue the scale of bond investment then ignore the risk of its cash, not only increased transaction costs but also can not achieve the expected benefits, or even cause economic loss.
the degree of difficulty of different types of assets or securities into currency is different, generally speaking , savings deposits, cash checks, etc.their performance is the best ,stock exchange, futures and cash performance bonds, etc., followed,the realized performance of real estate investment is poor.
Posted: June 7th, 2010 under Breaking News.
Tags: cash rate, realization of risk, risk, What is the realization of risk