Because banks are act as dealers in financial instruments such as bonds, foreign currency and derivatives, they are exposed to

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Banks act as dealers in financial instruments, which exposes them to trading risk - the risk of loss due to changes in market prices, volatility, and the ability to execute trades in a timely manner. While banks are also exposed to credit risk, liquidity risk, and interest risk, trading risk is the most relevant in this scenario.

Because Banks Are Act as Dealers in Financial Instruments Such