Financial Vocabulary

#281

Currency risk

Example sentences

1. The exporter faces currency risk when the dollar changes.
2. A forward contract can reduce currency risk.
3. The company measures currency risk in each foreign market.

#

#282

Operational risk

Example sentences

1. A computer failure created operational risk for the bank.
2. Staff training can reduce operational risk.
3. The company reported an operational risk event.

#

#283

Systemic risk

Example sentences

1. The bank failure created systemic risk for the financial system.
2. Regulators watch large firms for systemic risk.
3. Systemic risk can spread from one institution to many others.

#

#284

Systematic risk

Example sentences

1. A recession is a source of systematic risk.
2. Diversification cannot fully remove systematic risk.
3. The investor accepted some systematic risk for higher returns.

#

#285

Unsystematic risk

Example sentences

1. A factory fire created unsystematic risk for one company.
2. Diversification can reduce unsystematic risk.
3. The fund holds many stocks to limit unsystematic risk.

#

#286

Counterparty risk

Example sentences

1. The bank checked counterparty risk before signing the swap.
2. Counterparty risk means the other side may fail to pay.
3. The company asked for collateral to reduce counterparty risk.

#

#287

Default risk

Example sentences

1. The weak company has high default risk.
2. A higher interest rate may compensate for default risk.
3. The lender reviewed the borrower's default risk.

#

#288

Concentration risk

Example sentences

1. Putting all money in one stock creates concentration risk.
2. The bank reduced concentration risk by lending to different industries.
3. The portfolio has high concentration risk in technology shares.

#

#289

Country risk

Example sentences

1. The investor studied country risk before entering the market.
2. Political and economic problems can increase country risk.
3. The company reduced its business in places with high country risk.

#

#290

Political risk

Example sentences

1. A sudden law change increased political risk.
2. The company bought insurance against political risk.
3. Investors considered political risk before funding the project.

#

#291

Inflation risk

Example sentences

1. Inflation risk can reduce the real value of fixed payments.
2. Long-term cash savings may face inflation risk.
3. She bought some assets to protect against inflation risk.

#

#292

Reinvestment risk

Example sentences

1. The bondholder faced reinvestment risk when rates fell.
2. Reinvestment risk affects money received before maturity.
3. A callable bond may increase reinvestment risk.

#

#293

Volatility

Example sentences

1. The stock has high volatility and changes price quickly.
2. Market volatility increased after the news.
3. She chose a smaller position because of the volatility.

#

#294

Standard deviation

Example sentences

1. The fund has a lower standard deviation than the market.
2. Standard deviation helps measure how widely returns change.
3. The analyst used standard deviation to compare risk.

#

#295

Beta

Example sentences

1. The stock has a beta of 1.2.
2. A beta above one may mean larger market movements.
3. The investor checked beta before adding the stock.

#

#296

Value at risk

Example sentences

1. The bank calculated its daily value at risk.
2. Value at risk estimates a possible loss under normal conditions.
3. The risk team set a limit for value at risk.

#

#297

Stress testing

Example sentences

1. The bank used stress testing to study a severe recession.
2. Stress testing shows how a company may perform in a crisis.
3. Regulators asked the bank to improve its stress testing.

#

#298

Risk tolerance

Example sentences

1. Her risk tolerance is low because she needs the money soon.
2. The adviser asked about his risk tolerance.
3. A young investor may have a higher risk tolerance.

#

#299

Risk appetite

Example sentences

1. The company's risk appetite is set by senior management.
2. A low risk appetite limits risky investments.
3. The board reviewed the bank's risk appetite.

#

#300

Risk-adjusted return

Example sentences

1. The fund had a strong risk-adjusted return.
2. Risk-adjusted return compares profit with the risk taken.
3. She chose the investment with the better risk-adjusted return.

#