Fundamental Risk Concepts

  • Hans-Peter Deutsch
Part of the Finance and Capital Markets Series book series (FCMS)


The term risk signifies the uncertainty of the future developments in risk factors (e.g., interest rate curves, stockprices, foreign exchange rates, volatilities, etc.) resulting in a negative deviation of the quantity of interest (e.g., the value of a portfolio) from a certain reference value. Or expressed in terms of a bank balance sheet, risk is the possibility that the value of assets decreases or that the value of liabilities increases. Among all the conceivable types of risk, for example, market risk, credit risk, operational risk, legal risk, etc., market risk and credit risk are those which are most commonly traded via various financial instruments.


Standard Normal Distribution Credit Risk Internal Model Market Risk Short Position 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Hans-Peter Deutsch 2009

Authors and Affiliations

  • Hans-Peter Deutsch
    • 1
  1. 1.FrankfurtGermany

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