When assessing market risk, organizations typically focus on what factors?

Focusing on external market price fluctuations is essential when assessing market risk because these fluctuations can significantly impact an organization's financial performance and strategic positioning. Market risk pertains to the potential for losses due to changes in market prices, which can include changes in stock prices, interest rates, currency exchange rates, and commodity prices. Organizations must closely monitor these external factors to make informed decisions, develop risk mitigation strategies, and adjust their financial forecasts accordingly.

While internal employee satisfaction, operational cost reductions, and team performance metrics are important to an organization's overall health and success, they are more related to internal operational risks or human capital management rather than market risk. Market risk assessment requires organizations to stay attuned to external economic conditions and price movements that can affect their market value and competitive advantage.