n NISM Certifications
V-A NISM Series V-A
Medium

________ is the risk of mis-pricing or improper valuation of derivatives.

Practice question from Nism VA Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Counterparty Risk

  2. Model Risk

    Correct answer

  3. C

    Basis Risk

  4. D

    Credit Risk

Why this is the answer

Model Risk is the risk associated with the mis-pricing or improper valuation of derivatives due to errors or inaccuracies in the models used to value them.

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