market risk

Meanings

1. 1noununcountablefinancebusiness

   the chance that the value of investments will fall because of changes in prices, rates, or the whole market.

   Grammar: Usually no plural: 'Market risk is rising.' Use 'a market risk' only when you mean one particular danger.

   Patterns

   • market risk for something
   • exposure to market risk
   • reduce market risk

   Banks must hold enough capital to cover market risk.

   Falling share prices increased market risk for small investors.

   The report separates market risk from credit risk.

2. 2nouncountablefinancebusiness

   a specific danger that comes from conditions in a particular market.

   Grammar: Countable when you mean one identifiable danger: 'a market risk', 'several market risks'.

   Patterns

   • a market risk
   • market risks

   Currency swings are a market risk that exporters cannot ignore.

   The team listed the main market risks before launching the product.

Common combinations

market risk exposure

The fund's market risk exposure is limited to blue-chip stocks.

manage market risk

Traders use options to manage market risk.

market risk premium

The market risk premium reflects how much extra return investors demand.

high market risk

During a crisis, high market risk makes borrowing expensive.

Synonyms and how they differ

systematic risk

A more technical term for risk that affects the whole market and cannot be removed by diversifying.

volatility

Focuses on how much prices move up and down, not on the danger of loss itself.

Word family

market noun

The place or system where buying and selling happens.

risky adjective

Involving the possibility of loss or harm.

Commonly confused: market risk or credit risk?

Practice

Make it your own

Write a sentence using “market risk”, then check it and compare it with the examples above.

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