Question

Market risk is defined as the risk of loss arising from adverse changes in the market rates and prices from such items as

Equity Prices

Currency Exchange Rates

Interest Rates

All of these are correct.

Answer 1

Answer is All of these are correct

Explanation:

Market risk is defined as the risk of loss arising from adverse changes in the market rates and prices from

(i) Equity Prices:

Risk involved in holding equity in a particular investment. Say, Company may get losses due to some market conditions then the prices of equity may fall down. So, it's a risk of loss arising from adverser changes in the market conditions.

(ii) Currency Exchange Rates:

Currency Exchange Rates are fluctuating based on the international market conditions. Therefore there is a risk of loss arising from adverse change in the market.

(iii) Interest Rates:

Interest rates are depends upon the demand, More demand having more interest and Less demand having less interest rates. Demand is depends upon the market conditions. So, it is also has a risk of loss arising from adverse changes in the market