603.3. The principal risk for a retail credit business is credit risk, but retail banking is subject to a host of other risks. In addition to reputation risk, Crouhy et al itemize the following four non-credit risks which are faced by retail banking: interest-rate risk, asset valuation risks, operational risks, and business risks. These are described below, but without explicit identification:

I. This risk occurs on both the asset and liability side of the balance sheet. It transfers from retail business lines to the bank’s treasury and is managed in the bank’s asset/liability and liquidity (ALM) unit
II. These risks are managed as an inherent aspect of their business. An example is fraud detection.
III. Senior managers should be focused on these risks which include business volume, strategic risks, and mergers and acquisition (M&A) decisions.
IV. This risk is a special type (or sub-class) of market risk that impacts the retail business line’s profitability. It includes mortgage product prepayment risk. This risk is often centrally managed by the treasury unit.

Which of the following CORRECTLY matches the risk to its description?