Types of risk
Understand why four key risks: (1) Market risk — systematic price movements affect all investments (NGX bear market affects most stocks), (2) Inflation risk — Nigeria's high inflation can erode real returns on low-yielding assets, (3) Currency risk — naira volatility affects foreign-currency assets, (4) Credit risk — bond issuer default (e.
In this lesson
Types of risk is part of Investing Foundations. This preview shows how investment-universe connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Imagine this situation: You invest in a US dollar-denominated fund from Nigeria. The naira depreciates 40% against the dollar.
How it works
Four key risks: (1) Market risk — systematic price movements affect all investments (NGX bear market affects most stocks), (2) Inflation risk — Nigeria's high inflation can erode real returns on low-yielding assets, (3) Currency risk — naira volatility affects foreign-currency assets, (4) Credit risk — bond issuer default (e.g. corporate bond issuer goes bankrupt).
Apply it to a real decision
Real-life money moment: You invest in a US dollar-denominated fund from Nigeria. The naira depreciates 40% against the dollar. What type of risk does this represent and does it help or hurt you? The key lesson is: Currency risk cuts both ways.
Activity preview
Connect the ideas
Use the lesson to complete this short practice activity.
Try one real money action
Open Tasks and submit proof for one task, or open Requests and make a deposit request. Parent approval can happen later.
Quiz preview
'Currency risk' affects:
You invest in a US dollar-denominated fund from Nigeria. The naira depreciates 40% against the dollar. What type of risk does this represent and does it help or hurt you?