Market Risk

What Does Market Risk Mean?

Market risk is the possibility of loss in investment because of industry factors, such as sudden drop in demand or changes in the general economy.

It is also known as systemic risk.

Insuranceopedia Explains Market Risk

Market risk applies to the volatile nature of securities. The value of stocks can decrease abruptly, which can result in investment failures for those who have to sell them while their value is low.

Similarly, economic shifts, such as recessions and depressions, are significant market risks.