How to understand: Financial risks include market risks and company-specific risks.

Financial risk refers to the risk that the company may lose its solvency due to unreasonable financial structure and improper financing, which will lead to the decline of investors' expected income. Risk refers to the uncertainty of future income, the risk that you may suffer income loss or even principal loss in investment, and the risk that you take in order to obtain uncertain expected income. Risks include market risks and company-specific risks, which are specifically understood as follows:

(1) Market risk refers to the possibility that the risk of investors will increase due to the influence and changes of various factors, which will bring losses to investors. It is a kind of risk that affects all assets and cannot be eliminated through portfolio, also known as undivided risk or systemic risk; Features:

1. is caused by the same factor.

2. It affects all stock holders in the market, but some stocks are more sensitive than others;

Diversified investment cannot be eliminated. Asset reorganization cannot eliminate risks.

(2) Company-specific risk, which can also be called diversification risk or unsystematic risk, refers to the risk that has nothing to do with the fluctuation of the whole stock market or the whole futures market or the foreign exchange market and other related financial speculative markets, and refers to the possibility that the price of a single stock or a single futures, foreign exchange varieties and other financial derivatives will fall due to the changes of some factors, thus bringing losses to the securities holders. Features:

1. is caused by special factors, such as management problems of enterprises and employment problems of listed companies.

2. Only affect the earnings of some stocks. It is the part of risk unique to a certain enterprise or industry, such as real estate stocks, which will fall when the real estate industry is depressed.