Week Four Individual Assignment: Financial Transaction Risks
Explain the risk exposure(s) in the subsequent financial dealings. Spot which deals are influenced by interest rates or interest income. (CAUTION: Some can be influenced by both!)
Risk Types: Interest rate risk, Credit risk, Technology risk, Foreign exchange rate risk, Country or sovereign risk
Describe and justify risk type
Interest Rate or Interest Income?
A bank invests a 10 million, six-year fixed-rate business loan by selling one-year certificate of deposit.
Interest rate risk
Built from possible of interest rate altering from year 1 to 2 that could cause profits to be lost that might have been gained in the preceding year.
An insurance company spends its policy...
Excerpt from file: WeekFourIndividualAssignment:FinancialTransactionRisks Explaintheriskexposure(s)inthesubsequentfinancialdealings.Spotwhichdealsareinfluencedbyinterestratesorinterest income.(CAUTION:Somecanbeinfluencedbyboth!)
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