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    Question

    Which of the following risk is made up of transaction

    risk, default risk and portfolio risk?
    A market risk Correct Answer Incorrect Answer
    B liquidity risk’ Correct Answer Incorrect Answer
    C credit risk Correct Answer Incorrect Answer
    D country risk Correct Answer Incorrect Answer
    E Operational risk Correct Answer Incorrect Answer

    Solution

    Credit risk or default risk involves inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, hedging, settlement and other financial transactions. The Credit Risk is generally made up of transaction risk or default risk and portfolio risk. The portfolio risk in turn comprises intrinsic and concentration risk.

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