risk

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Exposure to adverse conditions which can result in the loss of an investment.

There are different kinds of risk, which can be grouped into four categories:

- Market risk (price) that is possible to change the price of money or the currency in which the debt is reflected.

- Credit risk (of default) which is that there is a change by which the debtor fails to comply with all or part of the commitment, it has an adverse impact on his wealth.

- Legal risk (control) consisting in changing the rules (laws, decrees, etc.) of a country, affecting the terms of the contract.

- Operational risk (of failure) that is the emergence of direct or indirect incidents that affect or will affect the payment of the debt. Although it could be considered from a negative approach, any change has positive effects but from the perspective of a whole could be more important the negative approach.

There are three different ways of managing financial risk: the insurance contract, the proactive management of assets and liabilities, and making investments in hedge (or hedging). All are complementary.