Market risk: Difference between revisions
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imported>Doug Williamson m (Spacing and italics added 22/8/13) |
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Market risk in the Capital Asset Pricing Model (CAPM) means the element of total risk which cannot be eliminated by holding a diversified portfolio of investments. | Market risk in the Capital Asset Pricing Model (CAPM) means the element of total risk which cannot be eliminated by holding a diversified portfolio of investments. | ||
Under the CAPM, only market risk is rewarded with additional returns. | Under the CAPM, only market risk is rewarded with additional returns. | ||
Market risk is often quantified by Beta, its designation in the CAPM. | Market risk is often quantified by Beta, its designation in the CAPM. | ||
Also known as Systematic risk or Non-diversifiable risk. | ''Also known as Systematic risk or Non-diversifiable risk.'' | ||
2. | 2. | ||
More generally, the risk of losses resulting from adverse changes in market prices or in general market conditions. | More generally, the risk of losses resulting from adverse changes in market prices or in general market conditions. | ||
== See also == | == See also == | ||
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* [[Risk]] | * [[Risk]] | ||
* [[Specific risk]] | * [[Specific risk]] | ||
Revision as of 09:31, 22 August 2013
1.
Market risk in the Capital Asset Pricing Model (CAPM) means the element of total risk which cannot be eliminated by holding a diversified portfolio of investments.
Under the CAPM, only market risk is rewarded with additional returns.
Market risk is often quantified by Beta, its designation in the CAPM.
Also known as Systematic risk or Non-diversifiable risk.
2.
More generally, the risk of losses resulting from adverse changes in market prices or in general market conditions.
