Types of portfolio risk part two. Now continuing on with our types of risk discussion, we'll move on to interest rate risk. And here we're most concerned with a rise in interest rates. So it's the possibility that the value of your investment or the securities that you hold will decline in value as a result of that unexpected rise in rates. And while raising rates could affect the value of a majority of asset classes, it's most prominent in fixed-income securities, fixed rate bonds. And when interest rates rise, the market value of these bonds decline. Now within the fixed income asset class, shorter term bonds have lower interest rate risk. Since there is a shorter period of time within what changes in interest rates can adversely impact the value of the bonds. On the other hand, there's higher interest rate risk associated with longer term bonds since there may be many, many years within which an adverse interest rate fluctuation can occur. Now, interest rate risk can be mitigated or even eliminated in certain instances by high hedging, by holding floating rate fixed income securities or including fixed-rate bonds within a very diversified portfolio. Next, liquidity risk. Now, liquidity risk arises from the difficulty of selling an asset in a timely manner, and there's also the importance around the price of a sale. It can be thought as of the difference between the true value or the intrinsic value of the asset and the likely selling price. So essentially it's the risk of an asset not being able to be sold in a secondary market, as there might not be any buyers willing to make that purchase, unless it is discounted significantly below true value. Now, while there is some liquidity risk in publicly traded securities, the highest level of liquidity risk is seen in the private market, private equity, private debt and any other non-exchange traded assets, like real estate. Next, credit risk and credit risk is essentially also known as default risk. It's a risk of a borrower not returning principle or failing to make an interest payment. And as credit qualities decline for borrowers, this leads to higher yields on investment due to the increased risk. If there's a higher level of perceived credit risk, investors or lenders will demand a higher rate of interest for their capital, or they may forego the investment or the loan. To use a real estate analogy, for example, a mortgage applicant with a low credit rating is likely to be perceived as a high credit risk individual. He or she will then receive a high interest rate on the mortgage as a result. And there are three major credit rating agencies that evaluate credit risk for corporations, individual securities, and even countries. And these rating agencies are Moody's, Standard and Poor's, and Fitch.