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Exposure to uncertain change. In popular usage, adverse change is appropriately emphasized. Annualized standard deviation of return is the generic measurement of risk in most markets, but both asset and liability managers increasingly add other statistical measures such as skewness and kurtosis to a risk profile or, even better, look at the entire probability distribution of returns and the maximum cost of adverse developments. See Kurtosis, Skewness, Standard Deviation (SD, s), Volatility, and specific types or causes of risk.
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