"Investment in securities market involves a number of risks. An investor should analyze and assess the risks." Explain various risks involved in investing in securities market.

Investment in securities market involves following risks – Market risk or Systematic Risk: It means that an investor may experience losses due to factors affecting the overall performance of financial markets and general economy of the country. Unsystematic Risk: Unsystematic risk can be described as the uncertainty attached with a particular company and industry. Inflation risk: Inflation risk is also called as purchasing power risk. It is defined as the chance that the cash flows from an investment would lose their value in future because of a decline in its purchasing power due to inflation. Liquidity risk: Liquidity risk arises when an investment cannot be bought or sold quickly enough. Business Risk: It refers to the risk that a business of a company might be affected or may stop its operations due to any unfavourable operational, market or financial situation. Volatility Risk: Volatility risk arises as the Companies' stock prices may fluctuate over time. Currency Risk: It refers to the potential risk of loss from fluctuating foreign exchange rates that an investor may face when he has invested in foreign currency or made foreign currency-traded investments. Therefore, an investor should analyze and assess the above risks while making investment in the securities market.