what is the source of market risk
Market risk is the risk of loss due to the factors that affect an entire market or asset class. Market risk is also known as undiversifiable risk because it affects all asset classes and is unpredictable. An investor can only mitigate this type of risk by hedging a portfolio. There are four primary sources of risk that affect the overall market: interest rate risk, equity price risk, foreign exchange risk and commodity risk. Interest rate risk is the risk of increased volatility due to a change of interest rates.