Explain how will you measure different types of Risks. Why equity investment is more risky?

The risk measures include the alpha, beta, R-squared, standard deviation, and Sharpe ratio,categories of risk,The bottom line. Risk measures can be used individually or together to perform a risk assessment. When comparing two potential investments, it is wise to compare like for like to determine which investment holds the most risk.

Types of risks

investment risk, market risk, inflation risk, business risk, liquidity risk and more. Generally, individuals, companies or countries incur risk that they may lose some or all of an investment.

EQUITY INVESTMENT IS MORE RISKY

Equity is riskier because in the event of a company bankruptcy or restructuring , equityholders are usually wiped out, while debt holders get first dibs at whatever cash is left over. Additionally, equity has a higher cost of capital due to debt ha tax-advantag i.e. intreast gets tax benififit.

While there are many potential benefits to investing in equities, like all investments, there are risks as well. Market risks impact equity investments directly. Stocks will often rise or fall in value based on market forces. As a result, investors can lose some or all of their investment due to market risk.