Unit 15- help clarifying a Qs on stocks + shares

Soph06

Hi

I have a supplementary task to do on unit 15 which i'm not 100% sure on.

State the characteristics of risk involved in investing in stocks and shares?

I know investing in stocks etc is risky (due to market) but can give higher returns. Is that what i'm supposed to write about?

Or is it to do with types of risks associated with stocks etc like financial risk, market risk, inflation, that kind of thing?

If anyone can help I would be grateful. I have had a look through osbourne and kaplan book and not much luck there.

thanks in advance.

SandyHood

Typically cash management looks at short term investment of operating cash balances.

So risk would be that the money invested in shares could be less in a few months time when the shares are sold.

Return could be dividends or capital growth.

But shares are not a good way to invest funds that need to be turned back into cash in a short period of time, by an organisation that really can't afford for the funds to fall in value.

Soph06

thanks sandy.

i was thinking on those thoughts of lines. just wanted to make sure i was answering the question.

after i send this off I have completed the immediate stage. Yay, so happy!