market-risk

Vocabulary Word

Definition

'Market risk' is the possibility that you might lose money in something because of changes in the overall business environment. For example, if a lot of new competitors enter the market, it could hurt your business.

Examples in Different Contexts

For financial planning, 'market risk' is considered when creating portfolios to ensure they can withstand market fluctuations. A financial planner might say, 'We diversify your investment portfolio to minimize market risk and protect your assets against market volatility.'

Practice Scenarios

Aerospace

Scenario:

We're shifting to a more sustainable design for our aircraft. But this move has its challenges, especially considering potential regulatory changes.

Response:

Since market risk from potential regulatory changes is high, we may want to invest more in compliance measures.

Marketing

Scenario:

Our new advertising campaign is developed to appeal to the younger markets. However, it's essential we remain considerate of evolving consumption habits.

Response:

Given the high market risk, what measures can we take to ensure the campaign's success?