Answer: 1: operational risk. 2: market risk. 3: credit risk. 4: legal risk

## Explanation The correct matching is **Option C**: 1. **Insufficient training leads to misuse of order management system** → **Operational Risk** - This involves inadequate internal processes and human error, which are classic operational risk events 2. **Credit spreads widen following recent bankruptcies** → **Market Risk** - Credit spread movements affect the market value of credit-sensitive instruments and represent market risk 3. **Option writer does not have the resources required to honor a contract** → **Credit Risk** - This is counterparty default risk, where the counterparty cannot meet its contractual obligations 4. **Credit swaps with counterparty cannot be netted because they originated in multiple jurisdictions** → **Legal Risk** - Legal and regulatory differences across jurisdictions that prevent netting arrangements constitute legal risk ### Why other options are incorrect: - **Option A**: Incorrectly classifies training issues as legal risk and legal issues as credit risk - **Option B**: Incorrectly classifies credit spread widening as credit risk (it's market risk) - **Option D**: Incorrectly classifies counterparty default as operational risk This classification follows standard risk management frameworks where credit spread movements are considered market risk, not credit risk.

Author: LeetQuiz .