Die Heuning Pot Literature Guide
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Finance Glossary

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Market Risk

Definition:

There are various ways in which risk manifests itself. Company risk refers to the risk that an individual company blows up - that is, it turns out that vitamins are actually bad for you and the industry that sells expensive horse serum that contains some rare form of Vitamin X goes under. There is currency risk as well - you buy shares in a Brazilian real estate builder who does great, but the Brazilian currency suffers in the world market because of local inflation and the investment ends up sucking. Market risk is just the risk of the entire market going down.

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