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Details of a client's investment portfolio appear in the following table:
Type of Funds
Amounts Invested ($)
Canadian equity growth fund
15,000
TSX equity index fund
25,000
Canadian resources fund
75,000
Canadian equity value fund
95,000
What is the primary risk of this investment portfolio?
The portfolio shown is heavily concentrated in Canadian equities, across growth, index, resources, and value funds. Since all investments are in equities, the primary risk is market risk (systematic risk), meaning the portfolio's value will fluctuate with overall stock market conditions.
Counterparty risk relates to derivative or trading partners.
Interest rate risk is most relevant to fixed-income securities.
Foreign exchange risk applies to foreign investments.
Thus, the correct answer is Market risk.
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