# Downside risk (also used in German, less frequently

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- Post ID: 592239
- Modified: 2023-07-25T21:01:47+00:00
- Language: en

## Definition

Abwärtsrisiko und Risiko aus einer Verschlechterung der Lage): The probability that the returns from an investment will be below expectations (returns are below the expectations). - For lenders (banks), the risk that the market price (interest rate) for a loan granted will rise during the term of the contract with the borrower. The bank then suffers a loss; this is the difference between the (higher) market interest rate for this loan today and the (lower) interest rate that the borrower has to pay according to the contract. - In the opposite case, one speaks of an upside risk. - In the case of an option, the risk to the holder of a short position in the event of rising prices of the underlying asset. - See call risk, upside risk, inventory credit. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 2.0.0