Most securities firms are subject to large amounts of interest rate and market risk because of the large amount financial assets on the balance sheet.

Question

Quizplus · Accepted Answer

Securities firms typically hold a large amount of financial assets on their balance sheets, which exposes them to interest rate and market risk. Changes in interest rates and market fluctuations can have significant impacts on the value of their holdings and, in turn, their profitability.

Most Securities Firms Are Subject to Large Amounts of Interest