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Market risk on derivatives
Balance sheet vs. off-balance sheet instruments
Market risk on specific financial instruments
Market risk management best practice guidelines
INTRODUCTION
Market risk is the potential loss on investment due to fluctuations in the market value of assets involved. Specifically, for derivatives products it is the negative impact that the fluctuations in the underlying security market value would have on the value of the derivative. The uncertainty is implicit in all derivative securities. It is the driving force behind their trading and development. However, some of the risk associated with it can be diversified away or hedged. The remaining factors that could potentially ...
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