Market Risk consists of which of the following types of risks?
i. Credit risk
ii. Currency risk
iii. Interest rate risk
iv. Liquidity risk
v. Other price risk
A) I, II, and V
B) II and III
C) II, III, and V
D) I and IV
E) All of the above

Question

Quizplus · Accepted Answer

Market risk encompasses risks that result from fluctuations in the financial markets and can affect the value of investments. This includes currency risk (due to changes in foreign exchange rates), interest rate risk (due to changes in interest rates), and other price risks (such as changes in equity prices or commodity prices). Credit risk and liquidity risk are not considered types of market risk; credit risk relates to the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations, and liquidity risk pertains to the ease with which an asset or security can be converted into cash without affecting its market price.

Market Risk Consists of Which of the Following Types of Risks