Market Risk

What is Market Risk?

Market risk is the risk of loss due to changes in market prices. The type of market risk depends on the type of investment, for example, equity risk is the risk of incurring losses on stocks, while currency risk is the risk of incurring losses due to changes in foreign exchange interest rates.

Where have you heard of market risk?

You may have heard of market risk associated with specific market movements. For example, inflation in the Japanese economy is seen as increasing market risk.

The information you need to know about market risk...

Market risk can be affected by developments outside the market. For example, the presidential election may be a factor affecting market risk, such as the 2016 US presidential election:.

In the United States, securities and Exchange Commission companies are required to disclose their current market risk in a separate section of the annual report. In this section, companies must describe the possible impact of financial markets on their performance.