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War Risk

What is 'War Risk'

1. The possibility that an investment will lose value because of a major, violent political upheaval. War generates uncertainty in the financial markets and causes many investors to panic and sell, which leads to a decline in prices.


2. The possibility that an individual or company will experience a major financial loss related to the destruction of property caused by a major, violent, political upheaval.

Explaining 'War Risk'

1. War risk falls under the broader category of political risk, which is one of several types of risk investors face. Others, to name just a few, include liquidity risk (the possibility of being unable to sell), currency risk (the possibility of an investment losing money because of a change in exchange rates) and capital risk (the possibility of losing the principal invested).


2. Terrorism, insurrection, military coup and other war events can create significant losses for personal and business property owners. Standard insurance policies do not always cover acts of war; in some cases, it may be necessary to purchase separate war risk insurance.


Further Reading


Financial crises and risk premia
academic.oup.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Antecedents of war: the geopolitics of low oil prices and decelerating financial liquidityAntecedents of war: the geopolitics of low oil prices and decelerating financial liquidity
www.tandfonline.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Living in the world risk society: A Hobhouse Memorial Public Lecture given on Wednesday 15 February 2006 at the London School of EconomicsLiving in the world risk society: A Hobhouse Memorial Public Lecture given on Wednesday 15 February 2006 at the London School of Economics
www.tandfonline.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

The economics of post-September 11 financial aid to airlinesThe economics of post-September 11 financial aid to airlines
heinonline.org [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Beyond greed and grievance: feasibility and civil warBeyond greed and grievance: feasibility and civil war
academic.oup.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Firm financial condition and airline price warsFirm financial condition and airline price wars
www.jstor.org [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Political news and stock prices: evidence from Trump's trade warPolitical news and stock prices: evidence from Trump's trade war
www.tandfonline.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …

Understanding civil war: A new agendaUnderstanding civil war: A new agenda
journals.sagepub.com [PDF]
… Financial Crises and Risk Premia*. Tyler Muir. Anderson School of Management, UCLA and NBER. Search for other works by this author on: Oxford Academic. Google Scholar. Tyler Muir. The Quarterly Journal of Economics, Volume 132, Issue 2, May 2017, Pages 765–809, https …


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