Internal factors affecting financial decisions include nature of the business, the size of business, expected return, the cost and risk involved, the asset structure of the business, the structure of ownership, the expectations of investors, the age of the firm, the liquidity in company funds and its working capital …

What are the risk inherent to financial instruments?

a) Market risk: The risk that changes in market prices have adverse effect on financial instruments. This can be caused by various factors, such as inactive market with a particular instrument, contract size and other factors that may affect the supply and demand and market participants’ behaviour.

What are the properties of financial instruments?

Four fundamental characteristics influence the value of a financial instrument:

• Size of the payment:
• Timing of payment:
• Likelihood payment is made:
• Conditions under with payment is made:

  What is the role of financial instrument?

  Financial instruments are assets that can be traded, or they can also be seen as packages of capital that may be traded. Most types of financial instruments provide efficient flow and transfer of capital all throughout the world’s investors.

  What are risk factors that influence your financial plan?

  Each person has their own appetite for taking risks. Some are naturally more comfortable taking risks than others. The other category of people who like to take either no risk or measured risk are termed as being risk averse. Your financial plan will shape up in line with your capacity to take risks.

  What are the factors that affect investment decisions?

  On the other hand, it does pay to obsess about factors that affect investment decisions like portfolio diversification, investment quality, and the extent to which your portfolio suits your personal goals and temperament. Portfolio diversification is a key factor affecting investment decisions:

  What are the economic factors that influence treasury yields?

  Interest rates, inflation, and economic growth are among the biggest so-called macro factors that influence investor perception about the economy and the direction of Treasury yields.

  How does your lifestyle affect your financial plan?

  Your lifestyle is a major factor which decides the path your investments are going to take in the future. As said, higher the standard of living, greater would be the investments. Many a times, windfall gains are a direct result of higher risks taken. However, there is a downside to this – you can lose everything you own too.