Which Term Defines the Risk Related to the Uncertainty of an FI's

question 71

Multiple Choice

Which term defines the risk related to the uncertainty of an FI's earnings on its trading portfolio caused by changes, and particularly extreme changes in market conditions?

• A)Interest rate risk.
• B)Credit risk.
• C)Sovereign risk.
• D)Market risk.
• E)Default risk.

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Definitions:

Correlation Coefficients

Correlation coefficients are statistical measures that quantify the degree to which two variables change in relation to each other, indicating both the strength and direction of this relationship.

Concurrent Validity

The extent to which test scores correlate with scores from other related measures assessed at the same time.

Discriminant Validity

The extent to which a construct is truly distinct from other constructs by correlating weakly with variables from which it is supposed to differ.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related outcome.