Market risk encompasses risk arising from changes in investment market values or other features correlated with investment markets, such as interest and inflation rates. This would include the consequence of investment market value changes on liabilities , and may also include the consequence of mismatching asset and liability cash flows.
However, some commentators and non-financial companies may use the term 'market risk' to refer to the risk of lower sales or profit margins resulting from changes in market conditions, where 'market' is interpreted as the market into which the products or services of that entity are sold. [Source: Institute and Faculty of Actuaries (IFoA) Enterprise Risk Management Specialist Principles (SP9) Core Reading]
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