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      Question

      Security firms are primarily exposed

      to
      A Credit risks Correct Answer Incorrect Answer
      B Market risks Correct Answer Incorrect Answer
      C Operational Risk Correct Answer Incorrect Answer
      D A and B Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Security firms are primarily exposed to market risk arising to the securities held for investments and trading. Market risk is primarily a risk that an investment may face due to fluctuations in the market . It deals with changes in market prices and interest rates which results in investment losses. Under market risk we have Equity risk, interest rate risk, Foreign exchange risk and commodity price risk.

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