3. **In the context of investment portfolios, how can diversification help in managing financial risk, and what are the limitations of diversification as a risk management strategy?
**What are the key differences between market risk, credit risk, and operational risk, and how do financial institutions typically mitigate these risks?
2. **How do interest rate changes impact the financial stability of a company, and what strategies can companies employ to manage interest rate risk?
3. **What role do financial derivatives, such as futures, options, and swaps, play in managing financial risk, and what are the potential risks associated with using these instruments?
**What are the main types of financial risk, and how can organizations effectively identify and measure these risks in their operations?
2. **How do market volatility and geopolitical events contribute to financial risk, and what strategies can businesses employ to mitigate the impacts of such uncertainties?
3. **In what ways do changes in interest rates and inflation levels affect a company's financial risk profile, and what techniques can be used to manage these risks?
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**What are the main types of financial risk faced by businesses and investors, and how can they be mitigated?
2. **How does systemic risk differ from other types of financial risk, and what measures can be taken by regulatory bodies to prevent systemic failures in the financial system?