Exchange Currency

replacement risk

Risk that a party will not fulfill their end of a contract, thus causing the other party to replace the traded item, and potentially incur a loss while doing so. If one party is not able to fulfill the contract for any reason, typically a replacement contract will be drawn up which requires the other party to give back what they've already been given. However, in many situations this is not easy for the party to do, because the value of the traded item is likely not the same as when they originally received it. Therefore, this party could possibly suffer a loss, and this is known as replacement risk.

Related information about replacement risk:
  1. Replacement Risk Definition | Investopedia
    The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need for a replacement contract.
     
  2. What is replacement risk? definition and meaning
    Definition of replacement risk: Risk that a party will not fulfill their end of a contract , thus causing the other party to replace the traded item, and potentially incur a ...
     
  3. Replacement Risk: Definition from Answers.com
    Replacement Risk The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need.
     
  4. Getting to grips with counterparty risk - McKinsey & Company
    default risk, replacement risk, and settlement risk. Clearly, all over-the-counter ... Replacement risk: after a default, risk that replacing deal under same conditions ...
     
  5. Revision Hip Replacement Risk Highest During First 18 Months - MPR
    Nov 2, 2012 ... Among elderly patients receiving total hip replacements for osteoarthritis, the risk of revision hip replacement is highest in the 18 months after ...
     
  6. Insurance & Technology Digital Issue: August 2012
    Jul 17, 2012 ... REDUCING REPLACEMENT RISK: Few industry experts question the need for a modern policy admin system to compete in today's insurance ...
     
  7. Revision Hip Replacement Risk Highest During First 18 Months ...
    Nov 2, 2012 ... Among elderly patients receiving total hip replacements for osteoarthritis, the risk of revision hip replacement is highest in the 18 months after ...
     
  8. Fx Forex Risk Management Hedging Glossary Foreign Exchange ...
    Replacement Risk - The consequence of settlement risk. If you have not received payment from your counter party, you now have to enter the market and make ...