Describe features you would choose to measure interest risks and identify which transactions are influenced by interest rates or income.

Financial Transaction Risks Table:
• Credit Risk: The risk that a counterparty will not be able to fulfill the terms of a financial agreement due to an inability or unwillingness to pay.
• Market Risk: The risk exposure from shifts in prices, exchange rates and interest rates.
• Operational Risk:The risk associated with errors, breaches or other unexpected events during the course of day-to-day activities related to trading operations.
• Liquidity Risk: The potential for losses arising from an inability to meet cash or margin calls due to inadequate liquidity available at certain times.

To measure interest risks and identify which transactions are influenced by interest rate or income, there are several features you could choose from such as duration, yield curve, convexity and coupon rate. Duration looks at how long it takes for a security’s price changes to offset any increase/decrease in its yield while yield curve gives us a visual representation of various yields with respect to time horizons (short/long term). Convexity measures sensitivity of bond prices when it comes changing levels in their rates over time while coupon rate helps identify the return on investment given its current price level relative to its maturity date. Finally, derivatives based products like swaps can also be used if you need more complex instruments that fit within the specific requirements of your organization’s investment strategy.