: Types of investment risk Understanding the Risks and Rewards of Investing You've heard that investing can be risky, but what exactly are the risks? Why do some investments succeed while others fall? The following examples demonstrate some of the potential pitfalls your investments might encounter. Select the primary type of investment risk that corresponds to each of the given descriptions. (Hint: These are not necessarily complete descriptions, but there is only one possible answer for each description.) Description Primary Risk Comp Whiz is a tech conpary that intialy sparked investor enthusiasm, revitting in a dramatic rise in share value afee the inital putic oflering in respanse to a fumor that the company's latest product contained a gitch, wivestars fushed to sel their shares, causing a sharp decline in the stock price. Real estale can be a vauabie irwestiment in times of price inflation, the higher the price level, the greater the value of the property. If the ganeral price level decines, however, these investments can- lose wignficant value. Prot to 2005-2009, the shoe compary Runner's High had been groweng at a steady pace, expandirg ils product ine and entering miakets in new regens. When the recession hit, however, inventories piled up as sales decined, woch that the company was unable to make payments fo some of its supplien. Understanding the Risks and Rewards of Investing You've heard that investing can be risky, but what exactly are the risks? Why do some investments succeed while others fali? The following examples demonstrate some of the potential pitfalls your investments might encounter. Select the primary type of investment risk that corresponds to each of the given descriptions. (Hint: These are not necessarily complete descriptions, but there is only one possible answer for each description.) Description Primary Risk CompWhie is a tech company that intially sparked investor enthusiasm, resulting in a dramatie rise in share value after the initial public offering. In response to a numor that the company's latest product contained a glitch, investors rushed to seli their shares, causing a shapp decline in the stock price. Real estate can be a valuablo investrment in Emes of price inflation, the higher the price level, the greater the value of the properfy, If the general price level dedines, however, these investments can lote signilicant value. Prioe to 2008-2009, the shoe company Runner' High had been growing at a steady pace, expanding ths product ine and entering makets in new regions. When the recession ha, however, inventories piled vp as sales decined, such that the company was unable to make payments to some of its suppliers.