Explain how Orange County's market risk led to liquidity risk and credit risk
What will be an ideal response?
Raising US interest rates reduced the market value of OCIP's portfolio. As a result, investors tried to withdraw their funds. The run on OCIP created an enormous demand
for cash (liquidity risk), which forced Robert Citron to sell assets at drastically reduced prices (market risk). These losses threatened OCIP's solvency (credit risk).
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Answer the following statement true (T) or false (F)
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