Considering the various financial catastrophes that have occurred both in the United States and around the globe, as analyzed by a risk consultant in a presentation aimed at novice risk managers, what is a key lesson learned from these historical risk management failures?

Exam-Like

The Orange County case emphasizes the importance of fully understanding complex derivative contracts before entering into them.

60.6%

The London Whale case emphasizes the importance of recognizing that correlations can increase sharply during a global financial crisis.

19.1%

The Northern Rock case emphasizes the importance of having a strong cybersecurity framework.

9.6%

The LTCM case emphasizes the importance of meeting regulatory capital requirements.

10.6%

Financial Risk Manager Part 1