Multiple choice

Market risk takes the form of all of the following, except

  1. Commodity price risk

  2. Interest rate risk

  3. Loan default risk

  4. Liquidity risk
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Market risk is the risk of losses in positions arising from movements in market prices.There is no unique classification as each classification may refer to different aspects of market risk like equity risk, commodity price risk, currency risk, liquidity risk and interest risk, etc. However, loan default risk is the chance that companies or individuals will be unable to pay the required payments on their debt obligations. Thus, option 3 is the correct answer.

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