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Principal Risk

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Principal Risk
The risk that an investment will decline in value below the amount one invested. For example, if one buys a security for $10 per share, there is a principal risk that it will decline to $8 per share and never recover. Principal risk is virtually non-existent for bank accounts, which are guaranteed by the FDIC up to a certain amount. However, it is significant for investments like stocks and, to a lesser extent, bonds.

principal risk
The possibility an investment will be worth less when it is sold than when it was purchased. Principal risk is high for common stocks compared to most fixed-income investments such as bonds, preferred stock, and certificates of deposit.


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As we have witnessed this year, the principal risks facing the group concern the UK housing market and consumer confidence.
Banks takes on hazards all the way through proprietary trading, completed by a distinctive set of traders who do not cross with clients and in the course of Principal Risk.
The OECD expects Indian growth to speed up next year but said the principal risk to its forecasts was "inflation not moderating" despite hikes in borrowing costs and other steps by the Indian authorities to cool prices.
 
 
 
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