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BRILLIANT’S Analysis of Risk and Uncertainty in Investment Decisions 457

2. General Economic Conditions: This 2. OZab BH$moZm°{_H$ H§$S>reÝg: BgHo$ A§VJ©V do
refers to the general economic conditions which BH$moZm°{_H$ H§$S>reÝg AmVr h¡ Omo gm_mÝ`V… {~OZog gå~ÝYr
influences the business activities generally. For J{V{d{Y`m| H$mo à^m{dV H$aVr h¢Ÿ& CXmhaU Ho$ {bE,
example, inflation, demand and supply, etc. BÝâboeZ, {S>_mÊS> Ed§ gßbm`, Am{XŸ&
3. Industrial Conditions: The third type of 3. BÝS>pñQ´>`b H§$S>reÝg: Vrgao àH$ma H$s [añH$
risk is the industry specific risk i.e. the risk {H$gr {d{eîQ> B§S>ñQ´>r go Ow‹S>r [añH$ h¡ AWm©V² Eogr [añH$
which primarily affects the earnings and Omo {H$gr {d{eîQ> BÝS>ñQ´>r H$s A{Zª½g Ed§ H¡$eâbmoO H$mo
cashflows of specific industry. Industrial risk _w»` ê$n go à^m{dV H$aVr h¡Ÿ& BÝS>pñQ´>`b [añH$ H$mo nwZ…
can be further divided into three factors: VrZ \¡$ŠQ>g© _| {d^m{OV {H$`m Om gH$Vm h¡…
(i) Technology Risk: It reflects the effect of (i) Q>oŠZmobm°Or [añH$: `h Q>oŠZmobm°Or Ho$ CZ à^mdm| H$mo
technologies that change or evolve in ways Xem©Vr h¡ Omo àmoOoŠQ> H$m _yb ê$n go {díbofU H$aVo
different from those expected when the g_` Ano{jV Q>oŠZmobm°Or _| AmE n[adV©Zm| Ho$ H$maU
project was originally analyzed. CËnÝZ hþE hm|Ÿ&
(ii) Legal Risk: It reflects the effect of changing (ii) brJb [añH$: `h {Z`_m| Am¡a A{Y{Z`_m| _| hþE
laws and regulations affecting a particular n[adV©Zm| H$m {H$gr {d{eîQ> BÝS>ñQ´>r na hmoZo dmbo
industry only. à^mdm| H$mo Xem©Vm h¡Ÿ&
(iii) Commodity Risk: It reflects the effect of (iii) H$_mo{S>Q>r [añH$: `h CZ dñVwAm| Am¡a godmAm| Ho$
price changes in goods and services that _yë`m| _| hmoZo dmbo n[adV©Zm| Ho$ à^mdm| H$mo Xem©Vr h¡
are used or produced. {OZH$m Cn`moJ AWdm CËnmXZ {H$`m J`m h¡Ÿ&

4. Company Specific Risk: This type of risk 4. H$ånZr go Ow‹S>r [añH$: Bg àH$ma H$s [añH$ _|
consists of factors which affect only a company. CZ \¡$ŠQ>g© H$mo gpå_{bV {H$`m OmVm h¡ Omo {H$gr H$ånZr
Some of these factors are strike, change in H$mo à^m{dV H$aVo h¢Ÿ& BZ_| go Hw$N> \¡$ŠQ>g© ñQ´>mBH$, _¡ZoO_|Q>
management, natural disaster such as flood, _| n[adV©Z, àmH¥${VH$ AmnXmE§ O¡go ~m‹T>, ^yH$ån, AmJ
earth-quake, fire etc. Am{X h¢Ÿ&
5. Market Risk: Market risk is the risk that 5. _mH}$Q> [añH$: _mH}$Q> [añH$ go Ame` Cg [añH$
affects essentially all companies and all projects go h¡ Omo g^r H$ån{Z`m| H$mo Ed§ g^r àmoOoŠQ²>g H$mo AbJ-
in varying degree. For example, change in AbJ T>§J go à^m{dV H$aVr h¢Ÿ& CXmhaU Ho$ {bE, BÝQ>aoñQ>
interest rate structure will affect the project aoQ²>g Ho$ ñQ´>ŠMa _| n[adV©Z H$m à^md Z {g\©$ CZ àmoOoŠQ²>g
already taken as well as those yet to be taken na hmoVm h¡ Omo nhbo go Mb aho h¢ ~pëH$ CZ na ^r hmoVm
both directly through discount rate and h¡ {OÝh| ewé H$aZm h¡Ÿ& `o à^md àË`j ê$n go {S>ñH$mCÝQ>
indirectly through cash flows. aoQ> Ho$ _mÜ`_ go Am¡a AàË`j ê$n go H¡$e âbmoO Ho$
_mÜ`_ go hmoVm h¡Ÿ&
6. International Risk: In case of foreign 6. BÝQ>aZoeZb [añH$: EŠgM|O aoQ> [añH$ Ed§
project, the earnings and cash flows may be nm°{b{Q>H$b [añH$ Ho$ H$maU \$m°aoZ àmoOoŠQ> H$s A{Zª½g Ed§
different than expected due to exchange rate H¡$e âbmoO Anojm go AbJ hmo gH$Vo h¢Ÿ&
risk or political risk.
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