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Market risk
What is market risk in the context of banking?
Market risk is the risk of loss arising from adverse movements in market prices, including interest rates, equity prices, foreign exchange rates, and commodity prices. It affects both trading book and banking book positions.
What is delta risk in options market risk management?
Sensitivity of option price to underlying asset price change
Which RBI guidelines govern market risk management in Indian banks?
RBI's Basel III framework guidelines, particularly the Master Circular on Prudential Guidelines on Capital Adequacy and Market Discipline, govern market risk management, requiring banks to maintain capital against market risk exposures.
What is vega risk in derivatives trading?
Risk from changes in implied volatility of underlying asset
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