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Market Risk
Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility. There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most commonly used types of market risk are: * '' Equity risk'', the risk that stock or stock indices (e.g. Euro Stoxx 50, etc.) prices or their implied volatility will change. * ''Interest rate risk'', the risk that interest rates (e.g. Libor, Euribor, etc.) or their implied volatility will change. * '' Currency risk'', the risk that foreign exchange rates (e.g. EUR/USD, EUR/GBP, etc.) or their implied volatility will change. * '' Commodity risk'', the risk that commodity prices (e.g. corn, crude oil) or their implied volatility will change. * '' Margining risk'' results from uncertain future cash outflows due to margin calls covering adverse value changes of a given position. * '' Shape risk'' * '' Holding period risk'' * '' Basi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Risk
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences. Many different definitions have been proposed. One ISO standard, international standard definition of risk is the "effect of uncertainty on objectives". The understanding of risk, the methods of assessment and management, the descriptions of risk and even the definitions of risk differ in different practice areas (business, economics, Environmental science, environment, finance, information technology, health, insurance, safety, security, security, privacy, etc). This article provides links to more detailed articles on these areas. The international standard for risk management, ISO 31000, provides principles and general guidelines on managing risks faced by organizations. Defi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Margining Risk
''Margining risk'' is a financial risk Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financi ... that future cash flows are smaller than expected due to the payment of Margin (finance), margins, i.e. a collateral (finance), collateral as deposit from a counterparty to cover some (or all) of its credit risk. It can be seen as a short-term liquidity risk, a quantity called Margin at risk, MaR can be used to measure it. Methodology In order to decrease the risk of a counter party to Default_(finance), default, a technique called ''portfolio margining'' is applied, which simply means that the assets within a Portfolio_(finance), portfolio are clustered and sorted by the descending projected net loss, e.g. calculated by a pricing model. One can then determine for which cluster(s) one wants to ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
