Acsignim ent -2

1. What is market risk and its types

Market risk refers to the risk ef fnancial loss resulting from adverge
movements in market variables such as interest rates, exchange rates,
cominodity prices, and equity prices. It is inherent inall investments and
fnancial transactions and arises from factors that are beyond the control
of the organization.
Iypes of risk
1. Interest Rate Risk:
Interest rate risk arises from changes in interest rates, which can affect
the value of fxed-income securities such as bonds and loans.
2. Currency Risk (Exchange Rate Risk):
Currency risk arises from changes in exchange rates, which can inpact the
value ef foreign currency-denominated assets or liabilties.
3. Comnodity Price Risk
Commodity price risk arises fronm changes in the prices of raw materials.
energy produets. agricultural products, and other comn odities.
4.Equity Priee Risk:
Eguity price risk also known as stock market risk, arises from Auctuations
in the prices of stocks and equity-based securities.

2. Short note on Technelogical

 2. PropertyManagement: REIT: that own and operate properties may
inplement strategies to enhance property value and rentalincome through
effective property management practices. This may include maintaining and
4pgrading properties, eptimizing tenant mik and implemerting cost-saving
measures to improve operational eficiency.
3. Diversihcation: Diversihcation is a key strategy enployed by many REIT:
to mitigate risk and enhance portfolio performance. REIT: may diversify
their property holdings across diferent geographic regions. property types,
and tenantindustries to reduce exposure to specifhc market or sector risks.
4. Income Generation: REIT: typically prioritize income generation for
shareholders by investing in properties with stable andpredictable cash
flows, such as long-term leased commercial properties or residential rental
properties. They may focus on acquiring properties with high occupancy
rates, long-term leases, and rental escalations to provide steady dividend
income to investors.

4. Write chort note on Hedge unds

Hedge funds are investment vehicles that pool capital from accredited
investors and institutions to pursue various investment strategies with the
goal of generatingpositive returns while managing risk. Ualike traditicnal
investment funds, hedge funds have more Rexibility in their investaent
approaches, often employing sophisticated techniques and lveraging
strategies to achieve their objectives. These funds are typicaly managed by
experienced investment professionals knowh as hedge fund managers, wbo
risk
Technalegical risk encompasses a wide array of potential threatsthat stem
from the utilization, adoption, or relianee on technology within
organizations.
As technelogy plays an increasingly pivotal role in modern business
operations, the exposure to these risks has grown significantly. Among the
most prevalent forms of technological risk is cybersecurity, which
eneompasses threats such as hacking. malware. phishing attacks, and data
breaches.
Such breaches can lead to unauthorized access to sensitive information,
resulting in fnancial losses, reputational damage, and legal liabilities.
Moreover, rapid technological advancements can render existing systems or
products obcolete. posing risks related to investments in outdated
technologies and loss of competitiveness.

3. Explain REIT ' What are its investment strategies

Real Estate Tnvestment Trusts (REIT:) are companies that own, operate,
or finance income-producing real estate across various sectors such as
residential comnereial industrial and retailproperties
some common investment strategies include:
1. Acquisition andDevelopment: REITs may focus on acquiring and
developing properties with the potential for capital appreciation and rental
income. They may target properties in high-grouth markets or sectors with
favorable supply-demand dynamics, such as esidential multifamily housing.
offee buildings, or industrial warehouses.
have signifcant discretion in selecting investments and managing
portfolio
risk.

Hedge funds often employ leverage to amplify returns, which can magnify
both gains and losses, increasing their risk profle. Additionally hedge fun
typically charge perform ance-basedfees in addition to manageament fees,
aligning the interests of fund managers with th0se of investors.