The contingent risk effects include:
A)identified-interest rate risk and takedown risk
B)credit risk and aggregate funding risk
C)Both A and B
D)Neither A or B
E)Contingent risk does not have effects

Question

Quizplus · Accepted Answer

Contingent risk refers to risks that may arise from unexpected events or circumstances. The two main types of contingent risk are identified-interest rate risk and takedown risk, which fall under the category of market risk, and credit risk and aggregate funding risk, which fall under the category of credit risk. Therefore, the correct answer is C, as both options A and B are examples of contingent risk effects. Option D is incorrect, as both identified-interest rate risk and takedown risk are forms of contingent risk. Option E is also incorrect, as contingent risk refers to real and potentially negative consequences that can result from uncertain events, and does have effects.

The Contingent Risk Effects Include