Section A provides a list of items related to various investment portfolios that have been reviewed by an auditor. Section B provides a list of types of risk exposure the auditor needs to consider relative to the items found in the investment portfolios reviewed. 

Section A
1. A town holds 20 percent of its investments in money market accounts.
2. A county holds some securities with a BBB– credit rating.
3. Bonds that are not in the city’s name are being held by a bank.
4. A state holds investments in a foreign country that is a significant trading partner of the state.
5. A county holds several variable-rate interest investments.
6. The state is the issuer of 5 percent of the bonds held by a town’s investment portfolio.
7. The state invests in derivative instruments as a hedging strategy. 

Section B
a. Credit risk
b. Custodial credit risk
c. Concentration of credit risk
d. Interest rate risk
e. Foreign currency risk

Required
Identify the primary type of investment risk related to each of the items reviewed by the auditor. For each item listed in Section A, select the best answer from Section B.