Final answer:
ETNs face both market and credit risks. Market risk involves fluctuations in value, while credit risk pertains to the possibility of issuer default.
Step-by-step explanation:
Exchange-Traded Notes (ETNs) carry both market and credit risk. Market risk refers to the potential for an ETN's value to fluctuate due to changes in the underlying assets or index it tracks, as well as broader economic changes. Credit risk concerns the possibility that the issuer of the ETN might default on their obligations, which can significantly affect the instrument's value.