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    Question

    Which of the following is a type of interest rate

    risk?
    A Basis risk Correct Answer Incorrect Answer
    B Call risk Correct Answer Incorrect Answer
    C Funding risk Correct Answer Incorrect Answer
    D Time risk Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Interest Rate Risk (IRR) refers to potential impact on NII or NIM or Market Value of Equity (MVE), caused by unexpected changes in market interest rates. The interest rate risks include: 路聽聽聽聽聽聽聽聽 Gap or mismatch risk 路聽聽聽聽聽聽聽聽 Basis risk 路聽聽聽聽聽聽聽聽 Embedded option risk 路聽聽聽聽聽聽聽聽 Yield curve risk 路聽聽聽聽聽聽聽聽 Price risk 路聽聽聽聽聽聽聽聽 Reinvestment risk Call risk, funding risk and time risk are types of liquidity risk.

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