What is equity risk and how does it affect my investments?
Equity risk refers to the possibility of losing money due to a decline in the stock market. It affects your investments by influencing the value of your stocks.
Can you explain how equity risk is measured?
Equity risk is often measured using beta, which compares the volatility of a stock to the overall market. A beta greater than 1 indicates higher risk.
What strategies can I use to manage equity risk?
You can manage equity risk through diversification, using stop-loss orders, and investing in less volatile stocks or funds.
Is equity risk the same as market risk?
Not exactly. While equity risk is a type of market risk, market risk encompasses all risks affecting the entire market, including interest rate and currency risks.
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