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โ Due DiligenceRisks
1. Credit Risk: This refers to the risk that Glarner Kantonalbank's investments will not perform as expected due to default on loans or other forms of credit. This type of risk is always present when making investments and can be reduced by diversifying investments.
2. Market Risk: This is the risk that the prices of securities in which Glarner Kantonalbank has invested will fall due to economic or market conditions. This type of risk can be reduced by diversifying investments across different sectors and countries, as well as shifting between different asset classes.
3. Interest Rate Risk: This type of risk covers the potential for investments to become less profitable when interest rates rise. This risk can be mitigated by investing in short-term vehicles or hedging against changes in interest rates.
4. Liquidity Risk: This is the risk that Glarner Kantonalbank will not be able to liquidate its investments when needed, due to lack of buyers or higher transaction costs. This risk can be mitigated through careful pricing of investments and use of derivatives or other instruments designed to increase liquidity.
5. Exchange Rate Risk: This is the risk of losses due to fluctuations in currency exchange rates, which can be mitigated by diversifying investments across different currencies and using hedging strategies to reduce losses.