Market risk refers to the risk that an investment may face due to fluctuations in the market.
In other words, it is the risk that the market overall will lose value, rather than that one or more stocks or sectors will go out of favor to be replaced by those upon whom investors are smiling.
Market risk contrast with specific risk, also known as business risk or unsystematic risk.
Market risk is defined as the risk to a financial portfolio from movements in market prices such as
Foreign exchange rates
Interest rates, and
Market risk is generally expressed in annualized terms, either as a fraction of the initial value (e.g. 6%) or an absolute number (e.g. $6).