Introduction

The global financial system has inherent risk in financial instruments associated with financial assets. Market risk is a measure of risk that the market value of a financial instrument will decline over time due to a result in changes in exchange or interest rates. (1) It involves understanding the aspect of risk that determines there is a risk that price will fluctuate in one or more components of a financial transaction.

It is the risk of price fluctuation of property purchased, funds borrowed, or currency that is utilized. The fact that changes in exchange or interest rates has such an impact upon market risk necessitates a fundamental understanding of the term exchange rates and Read More