2

Kinds of Risk

Beyond the progressive causes of losses described in the preceding chapter, there are a number of roughly standard kinds of risk. Most of these labels for kinds of risk are either generally agreed to or at least understood. Figure 2.2 presents important categories of risk in the trading markets.

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Figure 2.2 Kinds of risk refers to the commonly used terms that describe “risk.”

We selected a number of different kinds of risk to describe in this chapter, but as we describe in the section titled “Other Definitions of Risk,” there are many different types of risk that we do not cover. We selected risk types that are strongly related ...

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