Understanding Market Risk within FRM® Course EduPristine
The Pulse of the Market: Understanding Market Risk within FRM® Course
Welcome back learners! In this blog post we are going to learn and understand about Market Risk in the FRM ® Course curriculum .
What is FRM® Course?
FRM stands for Financial Risk Manager; so, as the term suggests this course is all about in depth study of Risk Management. This designation is offered by GARP i.e., Global Association of Risk Professionals .
What is a Market Risk?
Market risk is also known as systematic risk. Defining market risk into simpler terms means it is a loss on investment. A few elements such as market volatility, price volatility, continuous market fluctuations etc. affect the financial market negatively. Investors should keep in mind that market risk isn’t subject to affect a particular industry, but it is going to affect everyone as a whole. Breaking this down says inflation rates go high which is very generic. It will be affecting all the industries and every single being very much; hope that was simple to understand. Another way of putting this is to change into legal rules & regulations by the government which will surely force everyone to change it’s that simple.
Types of Market Risk
1. Interest Rate Risk
Interest Rates are very volatile in the market depending on the increase or decrease in interest rate risk. Majorly this affects the fixed income securities i.e., bonds.
2. Commodity Risk
As the term says “commodity”, it basically means change of prices of basic commodities. This can in turn lead to negative market fluctuations.
3. Currency Risk
Firstly, currency risk is also known as exchange rate risk. Now what happens here is when there are fluctuations of currency globally it would affect one’s investments. So, if someone invests in foreign currency denominated assets, they would be very much affected.
4. Country Risk
When making an international investment decision one should be well informed about the market fluctuations there which will in turn be beneficial for them to decide whether international investments are feasible if yes then after how long that can be achieved if not then what are the other options available. There are other variables to consider while making international investments one should do their own research & do the needful.
Managing Market Risk
1. Diversification
This is the simplest concept to understand which states to disperse the investments into various other sectors in order to minimize risk. If diversification is done in the correct way, then the percentage of facing market risk can be manageable obviously it won’t decrease but with the correct tactics one can surely manage it.
2. Hedging
Hedging seems like a complicated concept, but it is still easy to understand and if practiced wisely one can surely benefit from this. First things first hedging helps one to minimize loss. Now you might be wondering how that can be done well, say if you have a share and the price decreases you have to buy a financial product called options; options would allow you to sell your shares at a specific price even if the market falls below that. You shouldn’t opt for options when the share price is high as you can benefit from the increased value of the share.
3. Asset Allocation
Asset Allocation is dispersing your investments into various asset classes such as; mix of stocks, bonds, and cash or money market securities. Other metrics to consider here are investor’s risk tolerance, time horizon, and financial goals.
4. Stop-Loss Orders
A stop-loss order is a directive that instructs a broker to automatically sell a stock if its price falls below a predetermined threshold, which is referred to as the “stop price.”
5. Stress Testing and Scenario Analysis
As the name suggests, this is all about creating a hypothetical market situation in order to notice how the portfolio would function.
6. Using Low-Volatility Investments
The term itself is quite simple to understand; what it means is making investments into the low volatility investments as it is subject to market fluctuations but there will be very less fluctuations as compared to others which in turn would provide a stable return overtime.
7. Stay informed
One needs to be updated about the market i.e., the fluctuations, the changes in order to be able to buy, sell & hold the stocks. Obviously, this won’t help one with predicting what exactly is going to happen but at least being updated will help one a lot.
8. Wait it out
As the name of the concept suggests that one shouldn’t panic if the value of the stock falls. Minor market fluctuations may have only transient effects on your accounts, which will be able to withstand over time. Before selling, consider the market’s general patterns and if you can afford to keep onto a long-term investment.
FRM® Course by EduPristine
EduPristine offers the Financial Risk Manager® (FRM®) Course which is administered by the Global Association of Risk Professionals (GARP) . EduPristine provides both Classroom Training (in Mumbai) & Live Virtual Classes (Online) at no extra cost along with soft skills training & placement assistance. Alongside EduPristine provides practical & experiential learning. Here we have excellent faculty i.e., industry experts to teach you. You can even go through the testimonials or FRM course review provided by the learners.
Conclusion:
So here we come to the end of this blog post. Hope you now have a basic understanding of the market risk in the FRM® Course. If you’re eager to know more about the FRM® course details, FRM® course fees, FRM® course duration, FRM® course eligibility, FRM® course syllabus & how to apply for FRM® course connect with the EduPristine team ASAP on the handles mentioned below. See you in our next blog post until then keep learning, keep growing.
MAKE YOUR CAREER IN
Need more Info?
Tags
- ABOUT FRM COURSE IN INDIA
- ABOUT THE US CPA COURSE
- ACCA
- ACCA CERTIFICATION
- ACCA COURSE
- ACCA COURSE DETAILS
- ACCA COURSE DURATION
- ACCA COURSE ELIGIBILITY
- ACCA COURSE ELIGIBILITY CRITERIA
- ACCA COURSE ELIGIBILITY IN INDIA
- ACCA COURSE FEES
- ACCA COURSE FEES IN INDIA
- ACCA COURSE IN INDIA
- ACCA COURSE STRUCTURE
- ACCA COURSE STRUCTURE AND FEES IN INDIA
- ACCA COURSE SUBJECTS
- ACCA COURSE SYLLABUS
- ACCA EXAM STRUCTURE AND PATTERN
- ADMISSION TO CFA
- BAT COURSE
- BEST FINANCIAL MODELING COURSE
- BEST FINANCIAL MODELING COURSE IN INDIA
- BEST ONLINE CFA PREP COURSE
- BEST ONLINE FINANCIAL MODELING COURSE
- CAREER OPPORTUNITIES FOR CPA
- CERTIFIED FINANCIAL PLANNER (CFP®) COURSE
- CFA
- CFA CERTIFICATION
- CFA COURSE
- CFA COURSE CURRICULUM
- CFA COURSE DETAILS
- CFA COURSE DURATION
- CFA COURSE FEES
- CFA COURSE FEES IN INDIA
- CFA COURSE FULL DETAILS
- CFA COURSE IN INDIA
- CFA COURSE IN INDIA CFA COURSE CFA COURSE DETAILS CFA COURSE SUBJECTS
- CFA COURSE SYLLABUS
- CFA COURSE TRAINING
- CFA FOUNDATION COURSE
- CFP CERTIFICATION
- CFP COURSE
- CFP COURSE DETAILS
- CFP® COURSE FEES
- CFP® COURSE SYLLABUS
- CFP® ELIGIBILITY
- CMA COURSE
- CMA COURSE DETAILS
- CMA COURSE DETAILS IN INDIA
- CMA COURSE DURATION.
- CMA COURSE ELIGIBILITY
- CMA COURSE ELIGIBILTY
- CMA COURSE FEES
- CMA COURSE FULL DETAILS
- CMA COURSE IN INDIA
- CMA COURSE SUBJECTS
- CMA COURSE SYLLABUS
- CPA ACCOUNTANT
- CPA COURSE
- CPA COURSE DETAILS
- CPA COURSE DURATION
- CPA COURSE ELIGIBILITY
- CPA COURSE IN INDIA
- CPA COURSE STRUCTURE
- CPA COURSE SYLLABUS
- CPA EXAM
- FINANCIAL MODELING
- FINANCIAL MODELING AND VALUATION
- FINANCIAL MODELING COURSE
- FINANCIAL MODELING COURSE CURRICULUM
- FINANCIAL MODELING COURSE DETAILS
- FINANCIAL MODELING COURSE FEE
- FINANCIAL MODELING COURSE IN INDIA
- FINANCIAL MODELING COURSE WITH PLACEMENT
- FINANCIAL MODELLING COURSE
- FINANCIAL MODELLING COURSE DURATION
- FINANCIAL MODELLING COURSE FEES
- FINANCIAL MODELLING COURSE ONLINE
- FINANCIAL RISK MANAGER
- FM COURSE & FRM® COURSE
- FRM
- FRM COURSE
- FRM COURSE CERTIFICATION
- FRM COURSE CURRICULUM
- FRM COURSE DETAILS
- FRM COURSE DURATION
- FRM COURSE ELIGIBILITY
- FRM COURSE FEES
- FRM COURSE IN INDIA
- FRM COURSE SYLLABUS
- FRM® COURSE SUBJECTS
- FRM® COURSE SYLLABUS & HOW TO APPLY FOR FRM® COURSE
- IN FINANCE
- PG PROGRAM IN BUSINESS ACCOUNTING & TAXATION
- PGP BAT COURSE FEES
- PGP BAT COURSE SALARY IN INDIA
- PGP-BAT COURSE
- PGP-BAT COURSE COURSE IN INDIA
- PGP-BAT COURSE DETAILS
- PGP-BAT COURSE DURATION
- PGP-BAT COURSE ELIGIBILITY
- PGP-BAT COURSE FULL FORM
- PGP-BAT COURSE IN INDIA
- PGP-BAT COURSE INSTITUTE IN INDIA
- PGP-BAT COURSE SYLLABUS
- PLACEMENTS TO CFA
- SOFT SKILLS
- US CMA COURSE
- US CMA COURSE DETAILS
- US CMA PREPARATION
- US CPA COURSE
- US CPA COURSE DETAILS
- US CPA COURSE FEES
- US CPA COURSE FULL FORM
- US CPA COURSE TRAINING
- US CPA EXAMS
- US CPA MEANING
- US-CMA
- US-CPA
- WHAT IS ACCA COURSE
- WHAT IS CFP® CERTIFICATION?
- WHAT IS CMA COURSE
- WHAT IS CPA COURSE
- WHAT IS FINANCIAL MODELING ALL ABOUT
- WHAT IS FINANCIAL MODELING COURSE
- WHAT IS FRM® COURSE? FRM® COURSE DETAILS
- WHAT IS FRM® COURSE? FRM® COURSE REVIEW
- WHAT IS US CPA COURSE?
- WHAT IS US-CMA COURSE
Leave a Reply