Question

    When a bank sanctions a large loan to a borrower, which

    of the following risks it may not have?
    A liquidity risk Correct Answer Incorrect Answer
    B market risk Correct Answer Incorrect Answer
    C credit risk Correct Answer Incorrect Answer
    D operational risk Correct Answer Incorrect Answer
    E concentration risk Correct Answer Incorrect Answer

    Solution

    Market risk is the risk of losses caused by adverse changes in the market variables such as interest rate, forex, equity price, commodity price, etc i.e. changes in the market rates or prices. In case of a loan, the bank is less likely to face market risk.

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