Financial Risk Manager Part 1

Get started today

Ultimate access to all questions.

A newly hired risk analyst at a bank is studying historical cases of financial disasters and their causes to learn how financial risks can arise in practice. The analyst focuses on the example of Barings Bank. Which of the following statements is correct for the analyst to make regarding the collapse of Barings Bank?

Real Exam

Community

LLeetQuiz

A rogue trader at Barings Bank convinced the bank's risk controllers that large unauthorized trades were necessary to hedge the bank's portfolios.

Comments

Loading comments...

Management of Barings Bank failed to investigate the high level of reported profits that were associated with supposedly low-risk trading strategies.

Traders at Barings Bank traded primarily in OTC foreign currency swaps that allowed the bank to delay cash payments on losing trades.

Management of Barings Bank was not aware of the losses incurred by the bank until clients reported unusual losses on trades that were booked to their accounts.