Banking Awareness - Basics Of Banking & Banking Terminology
Which risk mainly affects banks due to sudden changes in interest rates?
Which risk mainly affects banks due to sudden changes in interest rates?
medium Q6 of 15
Step-by-Step Solution
Step 1: Identify rate sensitivity
The question refers to interest rate changes.Step 2: Apply risk concept
Interest rate fluctuations are part of market risk.Final Answer:
Market risk → Option BQuick Check:
Interest rate change = Market risk ✅
Quick Trick: Rate movement = Market risk.
Common Mistakes:
- Mixing up rate risk with liquidity issues.
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