Which of the following is NOT an example of market risk?
A)A share investor whose portfolio has been devastated by a stock-market crash.
B)A loan on which the borrower is unable to make scheduled repayments.
C)A borrower who finds that interest rates in the money market are higher than expected.
D)An importer that has to cope with an unexpected depreciating exchange rate.
E)A fund manager intending to sell at a future date that may face falling share prices.

Question

Quizplus · Accepted Answer

Loan default risk is not considered market risk, it falls under credit risk. Market risk refers to the possibility of losses due to changes in market conditions such as interest rates, exchange rates, or stock prices. Options A, D, and E all involve market risks. Option C is also an example of market risk, as it involves the risk of fluctuations in interest rates in the money market.

Which of the Following Is NOT an Example of Market