Investments in fixed-income securities are risky

 A fixed income security's return from the day it is bought to the day it is sold can be split into two portions,

1.     the security's market value when it is sold.

2.     the cash flows security has been generated while it has been owned. additionally any further revenue from reinvesting the cash flow.

These two sections may be affected by a variety of environmental circumstances. Any security risk can be determined by measuring the impact of various market factors on the security's return characteristics.

The many risk categories that are present in fixed income securities include the following.

• Interest rate or market risk
• Risk of reinvestment
• Call or timing risk
• The danger of yield-curve maturity
• the risk of purchasing power inflation
• Liquidity or marketability risk
• Currency risk or exchange rate
• Risk of volatility
• Legal or political danger
• occasion risk
• Industry risk