Market risk: Difference between revisions
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Revision as of 12:00, 9 October 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.
