Market risk: Difference between revisions

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imported>Doug Williamson
(Align with qualifications material and link with Financial market risk page.)
imported>Doug Williamson
(Align with qualifications material.)
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The risk of losses or other adverse effects resulting from adverse changes in market prices or from unfavourable market conditions including market disruption or new and burdensome regulation.


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.
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In the Capital asset pricing model (CAPM) 'market risk' is an alternative name for systematic risk.
Market risk is often quantified by Beta, its designation in the CAPM.
 
''Also known as Systematic risk or Non-diversifiable risk.''
 
 
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More generally, the risk of losses or other adverse effects resulting from adverse changes in market prices or from unfavourable market conditions.




Revision as of 09:02, 1 June 2015

1. The risk of losses or other adverse effects resulting from adverse changes in market prices or from unfavourable market conditions including market disruption or new and burdensome regulation.


2. In the Capital asset pricing model (CAPM) 'market risk' is an alternative name for systematic risk.


See also

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