Glossary
Financial Risk Specialist Terms & Vocabulary
15 essential financial risk specialist terms with plain-English definitions: the vocabulary you’ll hear in training and on day one.
Key financial risk specialist vocabulary
These 15 terms come up constantly in financial risk specialist training, on the job and in interviews. Knowing them helps you follow instructions, document accurately and sound prepared.
- Backtesting
- Checking models against actual results.
- Basel III
- Bank capital rules.
- CCAR
- Federal Reserve stress test.
- Correlation
- How assets move together.
- Credit risk
- Loss from borrower default.
- Exposure
- Amount at risk.
- Hedge
- Position that offsets risk.
- Liquidity risk
- Not having cash when needed.
- Market risk
- Loss from price changes.
- Operational risk
- Loss from failed processes.
- Probability of default
- Chance a borrower defaults.
- Risk appetite
- Risk an organization will accept.
- Risk limit
- Maximum allowed exposure.
- Stress test
- Testing losses in bad scenarios.
- VaR
- Value at risk.
Practice these terms
Test yourself with the free Financial Risk Specialist practice test: it includes vocabulary questions built from this list. For a complete course, see Financial Risk Specialist training.
Browse terms from every career in our career glossary.