Financial Risk Manager Part 2
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In a training seminar focused on understanding and managing operational risks, a supervisor from Firm W discusses various potential risks that could impact the firm's operations, both in the short-term and the long-term. Can you provide an example of a loss that Firm W might suffer as a result of an operational risk?
In a training seminar focused on understanding and managing operational risks, a supervisor from Firm W discusses various potential risks that could impact the firm's operations, both in the short-term and the long-term. Can you provide an example of a loss that Firm W might suffer as a result of an operational risk?
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Explanation:
B is correct. In B, systems failure or incorrect systems caused the problem. The losses are directly due to an operational risk exposure. In A and C, an increase in interest rates and the fall in the value of an investment, respectively, are both examples of market risk exposure. In D, failure to repay debt is an example of credit risk exposure.