Egge: New page: {Primary areas of risk |type="{}"} { market } risk represents the risk associated with adverse movement in the value of a particular security or...

2008-04-03T03:58:46Z

New page: <quiz display=simple shuffle=true case=(i)> {Primary areas of risk |type="{}"} { market } risk represents the risk associated with adverse movement in the value of a particular security or...

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<quiz display=simple shuffle=true case=(i)>
{Primary areas of risk
|type="{}"}
{ market } risk represents the risk associated with adverse movement in the value of a particular security or class of securities.
{ Liquidity } risk related to the ability to quickly and easily trade, as well as the ability to meet financial obligations as and when they fall due.
{ credit } risk is the risk that a debtor of the portfolio will fail to perform all or part of a contracted obligation in a timely manner.
{ operational } risk related to the chance that a deficiency or breakdown in the effectiveness and accuracy of information systems or internal controls will result in a material loss.

{There are four specific kinds of market-related risk that a portfolio manager must consider
|type="{}"}
{ asset } { sector } risk: the risk of a major collapse of asset prices in a particular asset class, such as property or listed shares.
{ systemic } risk: the risk that all asset classes (except cash) suffer from price declines.
{ forecast } risk: the risk that forecasts are wrong as well as the risk than an allocation to different asset classes compounds the cost of 'getting it wrong'.
{ currency } risk: the risk that diversification into the international asset classes of overseas equities or overseas bonds does not reduce risk as much as required because of unexpected variability in exchange rates.

{market risk can be controlled by
|type="{}"}
{ diversification }
use of { derivatives }

</quiz>

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[[Category:Portfolio Management|Quiz 05]]

Portfolio Management Quiz 5 - Revision history

Egge: New page: {Primary areas of risk |type="{}"} { market } risk represents the risk associated with adverse movement in the value of a particular security or...