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CAIIB BFME Module B & C By Ashish Sir Class 16
What is the definition of market risk in the context of bank treasury operations?
Market risk is the risk of losses in on- and off-balance-sheet positions arising from movements in market prices, including interest rates, exchange rates, equity prices, and commodity prices.
What is the primary objective of market risk management in banks?
To identify, measure, monitor and control potential trading losses.
Which Basel framework introduced the standardised approach for market risk capital?
The Basel II framework introduced the standardised measurement method, later substantially revised under the Fundamental Review of the Trading Book (FRTB) under Basel III finalization.
What is the difference between systematic risk and unsystematic risk?
Systematic risk affects entire market; unsystematic risk is firm-specific.
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