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Market Risk [33]

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Bullet points include: Methods described previously focus on historic returns and are most common methods used in practice. Caveat: is the past likely to be a good guide to the future? May be contemporaneous data relevant to assessing future risks. Current credit ratings (credit risk) or equivalents (analyst recommendations?). Market-implied data. Calculate the (market) ‘price’ to hedge a risk by reference to market implied data, rather than historic data. Introduces sensitivity to (market) risk appetite

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