Financial price risk

Financial price risk

The chance there will be unexpected changes in a financial price, including currency (foreign exchange) risk, interest rate risk, and commodity price risk.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Financial Price Risk

The risk that the price of something will change significantly such that it results in a loss. For example, if one has an investment in a foreign currency and that currency changes in value, it may adversely affect the investment's value. Likewise, if one holds a long position in a commodity and the price crashes for any reason, one may take a loss. Financial price risk can be mitigated by any number of hedging strategies, but these almost always limit returns.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved