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Unlimited Risk |
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Unlimited Risk The risk that one's loss on an investment will be larger than the amount one originally invested. For example, in short selling one will lose money if the short sold security rises in price. Because the potential rise in price is theoretically infinite, one may lose much more than one invests. Likewise, a general partner of a company has unlimited liability, meaning that in the event of bankruptcy he/she must pay all debts the company incurs regardless of how much he/she invested in it. See also: Limited liability. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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