• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Feedback Risk

V

Viki2010

Member
I came across a discussion about feedback risk in Sweeting however the definition of what this risk covers is not in scope. Can someone please define "feedback risk"?
 
Sweeting defines feedback risk (7.7.3) as "the risk that a change in price will result in further changes in the same direction", a component of systemic risk. You could consider this a type of market risk/contagion risk. It is the risk that for example, someone influential sells a stock driving down the price which causes others to sell (either by choice or by necessity) further driving down the price. This "knock-on" effect could result in a crash (or v.v. a bubble).
 
Back
Top