Volatility risk
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Volatility risk
Volatility risk in
financial markets
is the
likelihood
of
fluctuations
in the
exchange rate
of
currencies
. Therefore, it is a
probability measure
of the threat that an
exchange rate
movement poses to an
investor
's
portfolio
in a foreign currency. The
volatility
of the exchange rate is measured as
standard deviation
over a dataset of exchange rate movements.
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This article uses material from
Wikipedia
®
and is licensed under the
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Campbell R. Harvey's Hypertextual Finance Dictionary
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Volatility risk
The risk in the value of
options
portfolios
due to the unpredictable changes in the volatility of the
underlying asset
.
Copyright © 2000,
Campbell R. Harvey
. All Rights Reserved.
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