Answer: 1: operational risk. 2: equity price risk. 3: basis risk. 4: legal risk.

## Explanation Let's analyze each event: 1. **A rogue trader within an institution** - This is **operational risk** because it involves internal failures, human errors, or misconduct within the organization. 2. **Stock XYZ decreases in price due to a market crisis** - This is **equity price risk** (a subset of market risk) as it involves price movements in financial markets. 3. **Using a put option to hedge an equity exposure** - This creates **basis risk** because the hedge may not perfectly offset the underlying exposure due to differences in timing, pricing, or other factors. 4. **Counterparty sues bank to avoid meeting its obligations** - This is **legal risk** because it involves legal disputes, litigation, or contractual enforcement issues. Therefore, the correct matching is: - 1: operational risk - 2: equity price risk - 3: basis risk - 4: legal risk This corresponds to **Option C**.

Author: LeetQuiz Editorial Team