n NISM Certifications
VII NISM Series VII
Medium

_________ refers to the possibility of incurring large losses from adverse changes in financial asset prices.

Practice question from NISM Series VII Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Liquidity Risk

  2. B

    Operational Risk

  3. Market Risk

    Correct answer

  4. D

    Credit Risk

Why this is the answer

Market risk is the risk of losses due to unfavorable movements in asset prices, such as stocks or bonds. It is influenced by factors like economic conditions, political instability, interest rate changes, and sector concentration.

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