Finance

Market Risk Definition

Market Risk Definition

Market Risk is the possibility for an investor to experience losses due to factors that affect the entire performance of the financial markets. Current market risk, also named “systematic risk,” cannot be eliminated through diversification, though it might be hedged against. The risk a major natural disaster can cause a decline out there as a whole is an example of market risk. Other causes of market risk consist of recessions, political uncertainty, changes in interest levels and terrorist attacks.