a) State sources of market Risks (2.5 Marks)

b) With specific reference to the work of Muriithi, J.G. Muturi, W.M. & Waweru, K.M.M., (2016). The effect of market risk on financial performance of commercial banks in Kenya. Journal of Finance and Accounting, 2016; 4(4): 225-233; attempt the following questions:

i) State and explain specific banking risks embedded in Market Risk.(5 Marks)

ii) What were the model specifications? (5 Marks)

iii) State parameters that were employed in the study, as measures of Market Risk? (5 Marks)

iv) Identify and briefly explain types of analysis performed to establish the effect of market risk on financial performance of banks in Kenya. (2.5 Marks)

v) Extract the resultant final regression model and explain the elements