Market risk refers to the risk of losses due to what?

Market risk is associated with the potential for financial losses arising from changes in the market environment, specifically fluctuations in market prices. This includes variables such as stock prices, interest rates, commodity prices, and currency exchange rates. These fluctuations can impact the value of investments and lead to losses for investors and companies that are exposed to market conditions. Understanding market risk is crucial for financial professionals, as it helps in making informed decisions regarding asset allocation and risk management strategies.

The other options, while they represent different types of risks, do not fall under the category of market risk. Changes in supplier contracts relate to operational or counterparty risk; debtor insolvency is linked to credit risk, which concerns the possibility that a borrower may fail to repay a loan; and regulatory sanctions pertain to compliance and legal risks stemming from violations of laws and regulations. Each of these areas involves distinct risk factors that are not characterized by market price fluctuations.