Describe the relationship between credit risk, liquidity risk, and market risk, and how they interact during periods of market turbulence.

Credit risk, liquidity risk, and market risk are interconnected financial risks that can amplify each other during periods of market turbulence. Credit Risk is the possibility that a borrower will default on their debt obligations. During market turmoil, credit risk rises as businesses and individuals face financial distress due to economic downturns, volatility, and decreased access to capital. For example, during the 2008 financial crisis, many borrowers defaulted on mortgages, leading to widespread losses for banks and investors. Liquidity Risk is the risk that an asset cannot be easily bought or sold at a fair price. Market turbulence can lead to liquidity risk as investors sell assets to raise cash, creating a downward spiral in asset prices and decreasing the ability to offload assets quickly. For example, during the early stages of the COVID-19 pandemic, many bu....