Capital Markets School - October 2023

Internal Use Only

Market Risk There are four types of market risk – rates, equity, foreign exchange and commodities • Rate • Equity • Foreign Exchange • Commodities

Typically manifested in the investment portfolio through rate (i.e. price) risk

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Internal Use Only

Market Risk • Inverse Relationship Between Market Interest Rates and Bond Prices • Does Management (and the Examiner) understand the extent of price risk in the portfolio?  The portfolio must also be examined on an overall basis

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