Tuesday, 27 November 2012

Introduction to financial market risk management -study notes by Sandeep Kanao

Q : What is Market Risk?
Market risk is the risk associated with the fluctuations in the value of investments.

Q: What are the 4 market risks observed?
  1. Equity risk – risk of changes in stock prices
  2. Interest rate risk – risk of changes in interest rates
  3. Currency risk – risk of change in foreign currency rates
  4. Commodity risk – risk of change in commodity prices

 Q:  What is notional amount?
This is principal amount (face value) to be paid. It remains the same thus called notional.

Q : What is Value-at-risk (VaR) : explained by Sandeep Kanao





Q: What is stress testing?

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