- Liquidity Risk:
The probability that the investment cannot be readily converted into cash. The best example of this risk is with real estate, which can be difficult to sell when the real estate market is weak. Even when the real estate market is strong, it can take time to locate a qualified buyer of the property for the desired price.
- Credit Risk:
The probability that a bond issuer will default by failing to repay principal and interest in a timely manner.
- Legislative/Political Risk:
The probability that a new law or change in an existing law will make an investment less advantageous after it has been purchased. The risk for international investments is caused by changes in a country's political structure or new policies.
