In the BIS standardized framework model, the specific risk charge attempts to measure the decline in the liquidity or credit risk quality of the trading portfolio over the holding period.

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Quizplus · Accepted Answer

This is true. The specific risk charge is designed to account for the potential decline in the creditworthiness or liquidity of individual assets in a trading portfolio over the time period in which they are held. It is one of the components of the standardized framework for measuring market risk developed by the Bank for International Settlements.

In the BIS Standardized Framework Model, the Specific Risk Charge